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Kinderhook celebrates 23x gain on Tectum Holdings

Kinderhook Industries has sold a majority stake in Tectum Holdings (THI) to TA Associates. The sale represents a return in excess of $300 million for Kinderhook Capital Fund II, translating to approximately 23x Kinderhook’s invested capital.

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Ares Capital sells CitiStorage to Recall

Recall Holdings Limited has acquired CitiStorage for a consideration of $47.2 million. The seller was Ares Capital Corp. Based in Brooklyn, NY, CitiStorage is a records management firm.

Panda Power Funds Secures Financing for Power Plant

Panda Power Funds affiliate Panda Sherman Power has successfully completed the financing on its planned 758-megawatt natural gas-fueled, combined-cycle power plant in Sherman, Texas. The company will immediately start construction on the 204-acre site and expects commercial operations to begin by the end of 2014. Goldman Sachs and Credit Suisse arranged the senior debt financing for the plant. Ares Capital was the documentation agent.

Ares Offers $1.55B for 99 Cents Only Stores

Ares Capital has offered $1.55 billion for 99 Cents Only Stores, topping a $1.41 billion offer reportedly made by Leonard Green & Partners, Reuters reported, citing the New York Post. Ares reportedly offered $22 a share for the company. Shares of 99 Cents closed at $20.05 Thursday.

Ares Capital Commits $59 Mln for La Paloma Refinancing

Ares Capital said Monday that it committed $59 million in a $110 million second lien term loan that supports the refinancing of La Paloma Generating Co. Kern County, Calif.-based La Paloma is a four-unit, 1,022 MW natural gas-fired power facility owned by EIG Global Energy Partners and Rockland Capital.

Ares, Veronis Suhler Partner on Debt Deal

Ares Capital Corp. and Veronis Suhler Stevenson have closed on a deal providing $86.5 million in debt financing to an undisclosed provider of educational resources and services in the medical space. Ares Capital and VSS have a collaboration agreement focused on bringing flexible senior debt financing to middle market companies in the information, education, media and marketing services industries.

PE Firms Partner On Recycling Platform

After acquiring the recycling technology assets of FCR Inc., five private equity firms have partnered to launch Re Community Holdings LP, a platform focused on recycling communities. Pegasus Capital, Intersection, MissionPoint Capital Partners, HarbourVest Partners LLC, and Ares Capital Corporation have partnered on the effort, which is designed to enable community partners to generate additional revenue, recover community owned resources, create new jobs, fund budget shortfalls, and reduce their carbon footprint, the firms said in a release.

Casella Waste Systems Sells Unit to Pegasus Capital

Publicly traded Casella Waste Systems has agreed to sell certain recycling assets to a new company formed by buyout shops Pegasus Capital Advisors and Intersection LLC in a deal worth $130.4 million. The acquisition is financed by Pegasus Capital Advisors, MissionPoint Capital Partners, HarbourVest Partners, and Ares Capital Corporation. Craig Cogut, founder and managing partner of Pegasus Capital, will serve as chairman of the new company.

Ares Capital CP Funding Extends $400M Facility To January 2016

Ares Capital Corp.’s indirect subsidiary, Ares Capital CP Funding LLC, extended its $400 million revolving funding facility to Jan. 18, 2016, from Jan. 22, 2013. Wells Fargo Bank NA provided the facilty, which contains a three-year reinvestment period until Jan. 18, 2014 followed by a two year amortization period. The reinvestment period and final maturity may be extended two times for one year periods if mutually agreed upon by the parties. Pricing on the facility remains unchanged and the currently effective LIBOR spread under is 2.75 percent.

GE Capital, Ares Capital Boost Capital Available In Sr Secured Loan Program To $5.1B

Senior Secured Loan Program, which is managed by Ares Capital and an affiliate of GE Capital, increased the total available capital in the program to $5.1 billion from $3.6 billion. The amount of capital GE Capital and its affiliate will make available rose to $4.125 billion from $3.075 billion. The funds Ares Capital will make available rose to $975 million from $525 million. In addition, the program will now be allowed to hold loans in a principal amount up to $300 million.

BDCs Bulk Up to Serve Middle-Market Companies Snubbed by Banks

Taking advantage of a strengthening stock market and a lending market where many borrowers struggle to find financing, several business development companies (BDCs) are taking steps to fortify their financial positions.

BDCs are closed-end investment funds that are publicly traded on stock exchanges. Designed to provide capital to privately owned businesses, they can provide both equity and debt financing.

Healthier BDCs, led by Ares Capital Corp., are issuing stock and reducing their debt, while other such lenders, including American Capital Ltd., are taking other steps to shore up their capital positions.

Ares Capital Partners with VSS

Ares Capital and Veronis Suhler Stevenson announced a partnership “to source and provide flexible senior debt financing to companies in select industries with $5 million to $35 million of EBITDA.” Those industries are: Information, education, media and marketing services.

Ares Capital Q4 Profit Beats Street

Small business lender Ares Capital Corp (ARCC.O), which is buying struggling rival Allied Capital Corp (ALD.N), reported a fourth-quarter profit which beat market estimates helped by higher investment spreads and higher structuring fees.

Net investment income rose to $38.4 million, or 35 cents a share, from $32.1 million, or 33 cents a share, a year ago.

Ares Capital Posts Gain, Allied Capital Posts Loss

(Reuters) – Small-business lender Ares Capital Corp (ARCC.O) posted a quarterly profit that beat analysts’ estimates by a cent, while struggling rival Allied Capital Corp (ALD.N), which Ares agreed to buy last month, posted a quarterly loss. Ares Capital posted a net profit of $63.3 million, or 62 cents a share, for the third quarter, […]

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Ares Taints Portfolio With Allied Assets

Ares Capital today announced it will acquire its struggling peer Allied Capital, for $648 million. The deal came as a surprise to some, as the struggling BDC has only recently secured a debt restructuring after receiving a “going concern” notice from lenders in March. The restructuring was expensive, but Allied would have been able to make its 2010 payments, thanks to liquidity from a number of asset sales. That includes the auction of Callidus Capital Management LLC, which Bloomberg reported earlier this month. It’s not clear how today’s deal will affect that auction.

We won’t get any insight into management’s thinking until next week, when Allied combines its conference call on this announcement with its scheduled earnings call.

What we know at this point is that Ares Capital got Allied at a good price. Judging by trading since the announcement, the stock market favors the deal, as Allied shares had traded up by 34% as of publication. (With a negative spread, perhaps they’re even expecting a higher offer?) The price represented a 23.78% premium from Friday’s closing price. Allied Capital has around $11 billion in committed capital under management. By contrast, Ares Capital had approximately $30.0 billion of committed capital under management as of this quarter this year.

State of the Middle Market: Things Starting to Look Up

Stifel Nicolaus recently hosted its second “State of the Middle Market Dinner” which featured three middle market participants; David Golub (Golub Capital – private debt), Chuck Brizius (Thomas H. Lee Partners – private equity) and Michael Arougheti (Ares Capital – public provider of private debt). Their recap is after the jump…

Ares Capital to Raise $250 Million Debt Fund

(Reuters) – Ares Capital Corp (ARCC.O) said it plans to raise about $250 million through a debt fund for investing in newly originated and secondary senior secured debt. Ares Capital said it expects to sell a warrant for fair value to the new fund for cash that would permit the fund upon certain conditions to […]

Consolidation Among BDCs is “Necessary,” Ares Capital CEO Says

In a BDC CEO Roundtable discussion hosted by Stifel Nicolaus this morning, CEOs of three BDCs discussed the future of their asset class. Michael Arougheti, the CEO of Ares Capital, said, despite the fact that Ares has shown there are benefits to going it alone, there also are benefits to consolidation. “Over time, consolidation is […]

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