American Capital nets $97 million for DelStar sale

American Capital said Friday that it has sold DelStar to SWM International. American Capital has received $97 million for the sale. Moelis & Company advised American Capital and DelStar on the deal. Headquartered in Middletown, Delaware, DelStar is a maker of thermoplastic nets, nonwovens, laminates, and extruded components.

PRESS RELEASE

BETHESDA, Md., Dec. 13, 2013 /PRNewswire/ — American Capital, Ltd. (Nasdaq: ACAS) (“American Capital”) announced today that its portfolio company DelStar, Inc., including its subsidiary DelStar Technologies, Inc. (“DelStar”), was sold to SWM International (NYSE: SWM), a leading innovator of highly-engineered proprietary solutions centered around its paper technology. American Capital and its affiliated funds have received $167 million in equity proceeds, subject to post-closing adjustments, of which $97 million was received by American Capital. American Capital’s compounded annual rate of return earned on its senior debt, subordinated debt and equity investments since the fourth quarter of 2005 was 18%, including interest, dividends and fees earned over the life of its investment. American Capital received 2.6 times its equity investment, and realized a compounded annual rate of return of 19% over the life of its equity investment, including dividends and fees.
“We are extremely delighted with our successful investment in DelStar and the results of this transaction,” said Brian Graff, American Capital Senior Managing Director. “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.”
“We are excited for DelStar as it joins SWM in its next phase of growth and leverages its new partnership to execute on a number of growth opportunities, including new product introductions, product line extensions and domestic and international expansion,” said Dustin Smith, Managing Director, American Capital Buyouts Group. “With its leading position in the global filtration market segment, DelStar should continue to benefit from favorable end-market dynamics driving market growth, including increasing safe drinking water and other environmental regulations, aging and inadequate water infrastructures and demand from developing regions.”
Founded in 1946 and based in Middletown, DE, DelStar is one of the world’s leading manufacturers of thermoplastic nets, nonwovens, laminates and extruded components. The company manufactures high-quality, customized plastic and metal components used in a wide range of industries and market segments, including filtration, automotive, healthcare, industrial, food, electronics and textiles. DelStar’s products are used as components for applications including the core, support and media layers of air, water and liquid filters; highly breathable and/or protective fabrics used in healthcare applications such as finger bandages, wound dressings and surgical masks; and in industrial end-market applications including HVAC, automotive, clothing and food packaging. DelStar has employees in manufacturing, sales and distribution centers in the United States, Europe and Asia.
American Capital invested $114 million in the One Stop Buyout® of DelStar in December 2005. American Capital’s investment took the form of a revolving credit facility, senior term loans, senior subordinated debt and equity. For more information on American Capital’s investment in DelStar, visit http://www.americancapital.com/our-portfolio/delstar-technologies-inc.
Moelis & Company served as the exclusive financial advisor to American Capital and DelStar on the transaction.
Since American Capital’s 1997 IPO through the third quarter of 2013, the company has earned a 10% compounded annual return, including interest, dividends, fees and net gains, on over 365 realizations of senior debt, subordinated debt, equity and structured products investments, totaling $19 billion of committed capital. American Capital earned a 26% compounded annual return on the exit of its equity investments, including dividends, fees and net gains.
ABOUT AMERICAN CAPITAL
American Capital, Ltd. (Nasdaq: ACAS) is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products. American Capital manages $20 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $117 billion of total assets under management (including levered assets). Through an affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC) with approximately $10 billion of net book value and American Capital Mortgage Investment Corp. (Nasdaq: MTGE) with approximately $1 billion of net book value. From its eight offices in the U.S. and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million. For further information, please refer to www.AmericanCapital.com.

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