American Capital Ltd. (NASDAQ:ACAS), an internally diversified business development company currently taxed as a corporation rather than as a BDC, exited an investment recently when its portfolio company Sixnet Holdings LLC was sold to Spectris Plc. for $72m. Sixnet, in whose recapitalization ACAS invested in 2005, followed by additional investments in 2007 and 2009 to facilitate Sixnet acquisitions, supplies machine-to-machine cellular data products. Equity proceeds from the transaction totaled $12m, including $7m paid to ACAS (part of Sixnet was held by ACAS-managed portfolio companies). ACAS' senior debt investment of $37m was repaid in full as part of the transaction.
ACAS calculated its internal rate of return on the Sixnet investment at 15%. ACAS' compounded rate of return, from the date of its IPO through the second quarter of 2011, was 11%.
ACAS currently trades below $7, though its net asset value per share at the end of 2Q2011 was over $13. Getting a double-digit return on $13 for an investment at $7 seems an interesting prospect, though ACAS' NAV naturally varies with the value of the comparables against which its portfolio is valued.