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American Capital exits DelStar to SWM International for $97M

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December 13
6:34 PM 2013

Bethesda, Maryland-based American Capital Ltd said it has already sold its portfolio firm DelStar Inc to SWM International. The sale included DelStar Inc's subsidiary DelStar Technologies Inc. Together with its affiliated funds, American Capital got $167 million in equity proceeds for the sale, of which $97 million went to American Capital.

A publicly-traded private equity company and global asset manager, American Capital looks for opportunities in middle market private equity, real estate, leveraged finance, energy and infrastructure and structured products. Together with assets on its balance sheets and fee earning assets under management by affiliates, American Capital manages $20 billion of assets.

Middletown, Delaware-based DelStar manufactures thermoplastic nets, nonwovens, laminates and extruded components. Its products are used in the filtration, automotive, food, industrial, electronics, healthcare and textile market.

In the statement American Capital said that since the fourth quarter of 2005, it earned an 18% compounded annual rate of return on its senior debt, subordinated debt and equity investments. The private equity firm got 2.6 times its equity investment and was able to realize a 19% compounded annual rate of return in the life of its equity investment, together with dividends and fees.

American Capital Senior Managing Director Brian Graff said, "We are extremely delighted with our successful investment in DelStar and the results of this transaction. Since our One Stop Buyout of DelStar eight years ago, the company performed strongly, despite the economic downturn, and solidly grew revenues and EBITDA, introduced new products, improved operations and attracted new customers and contracts."

In December 2005, American Capital poured $114 million in its One Stop Buyout of DelStar. The investment was in the form of a revolving credit facility, senior term loans, senior subordinated debt and equity.

The financial advisor to American Capital and DelStar on the deal was Moelis & Company.

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