American Capital, Ltd. - The Wait Should Almost Be Over...
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Mon, May 23, 8:05 AM
- American Capital (NASDAQ:ACAS) shareholders will receive $6.41 per share in cash plus 0.483 shares of Ares Capital (NASDAQ:ARCC) for each share of ACAS they own - a total of $13.75 per share at current prices. As part of the deal, Ares Management (NYSE:ARES) is providing financial support, will pay $275M in cash, or $1.20 per share to America Capital shareholders, and has agreed to waive up to $100M in fees over the ten quarters following the close.
- The deal is expected to be immediately accretive to ARCC core EPS, with potential for boosted dividends over time. It's also expected to boost NAV per share between the first and second full years after closing, and beyond.
- An owner of 14.4% of American Capital, Elliot Management is fully supportive of the deal. It's expected to close within the next 12 months.
- Conference call at 8:30 ET.
- Stocks are all halted from trade at the moment.
- Previously: Ares Capital buying American Capital; American Capital Agency internalizing manager (May 23)
Mon, May 23, 7:52 AM
- American Capital (NASDAQ:ACAS) owners will receive about $3.43B in cash and ARCC common stock consideration, or $14.95 per share.
- In addition, American Capital is selling the manager of American Capital Agency (NASDAQ:AGNC) to American Capital Agency for $562M, or $2.45 per share. Ares Management (NYSE:ARES) will help finance the deal.
- Together, American Capital shareholders are getting $17.40 in value for each share they own vs. Friday's close of $15.62.
- A conference call is set for 8:30 ET.
- Source: Press Release
Fri, Jan. 8, 12:51 PM
- American Capital (NASDAQ:ACAS) touched as high as $15.07 this morning after management and the board last night officially putting the company up for sale. It's currently ahead 4.1% on the session to $14.54.
- The last reported net asset value (Sept. 30) was $20.44, suggesting some disconnect between what the market and what the company view as the true valuation.
- Related: Texas Regulatory Filings, Mystery Compensation Call Into Question American Capital's Internal Controls And Management's Integrity (Dec. 10, 2015)
- Related: I Screwed Up On American Capital: Here's What I Learned (Dec. 17, 2015)
Thu, Jan. 7, 6:54 PM
- American Capital (ACAS -2%) says it's done with the first phase of a strategic review and the company will proceed looking for offers to buy the company in whole or in part.
- "After careful consideration, the Board unanimously concluded that soliciting proposals at this time provides the best and most expedient path to unlock shareholder value," says Neil Hahl, who chaired the Independent Strategic Review Committee.
- CEO and Chairman Malon Wilkus says management concurs in the recommendation.
- Goldman Sachs and Credit Suisse will assist in soliciting bids.
Mon, Jan. 4, 9:28 AM
- Under activist pressure, American Capital (NASDAQ:ACAS) bought back 8% of its float in Q4 with the purchase of about 20.7M shares at an average price of $14.44 each.
- With Elliot Capital looking on, the company in late November boosted its buyback program to $600M-$1B from $300M-$600M, with purchases to be made at only at prices below 85% of net asset value.
- Shares +2.5% premarket to $14.14 (Sept. 30 NAV was $20.44).
Nov. 16, 2015, 8:47 AM
- Disclosing an 8.4% stake in American Capital (NASDAQ:ACAS), Elliot Management comes out against management's plan to spin out its BDC assets.
- Noting continued low valuation of the stock vs. peers, poor capital deployment, an entrenched board with suspect qualifications, and excessive compensation and overhead, Elliot proposes a five-step plan to help bring the share price to its $23 target:
- 1) Withdraw spin-out proposal; 2) Add more qualified independent board members; 3) Monetize the broadly syndicated loan portfolio, with proceeds used to boost share repurchases; 4) Cut cost by $50M-$75M per year; 5) Engage in a meaningful strategic review.
- The stock's higher by 5% to $15.02 premarket.
- Elliot's "BetterACAS" website is here.
Nov. 6, 2015, 11:07 AM
- American Capital (ACAS +2%) reported gains in both income and book value after the close on Wednesday. A fast pace of buybacks (3.6% of the float in Q3) done at a massive discount to book value, pushed along the quarterly advance in book value.
- Nevertheless, the company is running out stock - today's float of about 260M shares compares to roughly 380M when American Capital began buying back shares four years ago.
- Cantor Fitzgerald upgrades to Buy from Hold. The $19 price target is 38% above last night's close, and a 7% discount to Sept. 30 book value of $20.44.
- Previously: Buybacks boost returns at American Capital (Nov. 4)
- Previously: American Capital beats by $0.03, beats on revenue (Nov. 4)
Sep. 29, 2015, 3:24 PM
- It's not just about energy anymore, according to a BAML report. "The malaise is spreading." High-yield, says the team, "[is] a slow-moving train wreck that just seems to be accelerating."
- Equity-type proxies for the high-yield market, business development companies are under major selling pressure again today, with already large discounts to NAVs growing even wider.
- Previously: Ares Capital greenlighted for $100M in buybacks (Sept. 28)
- Prospect Capital (PSEC -3.6%), Ares Capital (ARCC -2.7%), Apollo Investment (AINV -4%), TCP Capital (TCPC -5.4%), Monroe Capital (MRCC -4.5%), Oxford Lane Capital (OXLC -5.4%), PennantPark Investment (PNNT -1.8%), American Capital (ACAS -2.5%), Medley Capital (MCC -4.1%), Harris & Harris (TINY -5.4%)
- ETFs: BDCL, BDCS, BIZD, FGB
Jun. 26, 2015, 3:43 PM
- Continued strong economic data (June consumer confidence beat expectations) and apparently optimism over a Greek deal getting inked this weekend make for good excuses for today's selling in fixed income.
- The U.S. 10-year yield is up seven basis points to 2.48%. Short-term rate futures continue to read more dovish than the Fed, predicting just one 25 basis point rate hike by year-end.
- TLT -1.2%, TBT +2.4%.
- Among the income favorites, utilities (XLU +0.6%) and equity REITs (IYR +0.2%) are being spared punishment today, leaving jittery investors to focus their selling in mortgage REITs.
- Also in the red are BDCs, led by Prospect Capital (PSEC -2.5%) and Fifth Street Finance (FSC -1.5%). American Capital (ACAS -1.3%), Medley Capital (MDLY +0.1%), THL Credit (TCRD -1.2%), PennantPark (PNNT -1%).
- ETFs: BDCL, BDCS, BIZD, FGB
Mar. 25, 2015, 12:43 PM
- American Capital (NASDAQ:ACAS) had been a big buyer of its stock for nearly three years, but suspended purchases about a year ago amid a strategic review that ultimately led to a plan to spinoff the BDC business.
- While waiting for said spin-off to take place, and under some activist pressure, American Capital today announces the resumption of its repurchase program as of Feb. 23.
- The stock price is currently $15.06 vs. Dec. 31 NAV of $20.50.
- Shares have added about a dime since the news broke, now flat on the session.
Mar. 5, 2015, 3:20 PM
- The activist investor - an owner of about 2.4% of American Capital (ACAS +1.3%) - is pleased with the plan to spin off the asset management business from the BDC, but not thrilled with management's decision since to shun repurchases in favor of funding new investments.
- American Capital believes the market will assign a high multiple to the management business (American Capital Asset Management), and therefore the best use of capital is to build up assets.
- Orange wants to see both a high multiple on ACAM and a share price on the BDC that's more inline with net asset value, and believes investors would reward a management consistently buying back stock when it's meaningfully undervalued.
- American Capital currently trades at about 73% of the last-reported NAV.
- "A balanced combination of growth investments and capital returns would build immediate credibility and demonstrate that management is a good steward of capital," says Orange, urging the company to set aside at least one-third of the $600M-$800M allocated for ACAM growth.
- Shares have gained about 1.5% since the letter hit.
Nov. 6, 2014, 9:14 AM
- Gainers: PLNR +74%. PESI +24%. SWIR +20%. MEET +13%. RVLT +11%. COT +11%. DATA +11%. ACAS +10%. NDLS +9%. KATE +8%. KATE +8%. WFM +9%. HZNP +6%. CECO +6%. DRYS +5%. TRUE +5%.
- Losers: AEZS -51%. SZYM -47%. SNMX -26%. GNW -24%. WWWW -22%. CSOD -19%. PHMD -17%. GERN -14%. MCP -12%. GNRC -11%. WAC -9%. QCOM -7%. Z -7%. PBR -5%.
Nov. 5, 2014, 4:27 PM
- American Capital (NASDAQ:ACAS) will spin off two BDCs - American Capital Growth and Income and American Capital Income - leaving ACAS primarily in the asset management business.
- American Capital Growth and Income's assets will be those primarily issued by companies purchased through American Capital One Stop Buyouts, senior floating rate loans to private companies, and CLO equity investments. This business is at present allocated about $3B of equity.
- American Capital Income's assets will mostly be second lien and mezzanine loans to middle market companies. This business is at present allocated about $1B of equity.
- Both new BDCs will be managed by American Capital. As part of the deal, American Capital will consolidate its operations and remaining assets with American Capital Asset Management. This business at present allocated about $1B of equity.
- The company expects about $25M in cost savings annually, beginning in 2015.
- Previously: American Capital beats by $0.02, beats on revenue
- The earnings conference call is set for tomorrow at 11 ET
- Shares +9.5% after-hours
Nov. 5, 2014, 4:14 PM
- American Capital (NASDAQ:ACAS): Q3 EPS of $0.18 beats by $0.02.
- Revenue of $129M (+21.7% Y/Y) beats by $17.1M.
- Shares +9.2%.
Aug. 18, 2014, 11:30 AM
- Prospect Capital's (PSEC +0.9%) sizable $210M lending deal announced this morning and 9 booked deals over $100M in the last year suggest it and many of its larger brethren are competing for larger borrowers who don't fit the mold of the larger syndicated loan market BDCs typically play in, writes Nicholas Marshi.
- On the good side, these "story credits" allow Prospect and other BDCs to charge higher rates and fees than are available in the "dirt cheap" syndicated loan market. And Prospect (and others) have become so big that typical middle market deals aren't enough to move the needle on their portfolios anymore.
- Ideally, though, no individual loan would represent more than a tiny fraction of the portfolio, so while "big fish" deals allow for good earnings and maintenance of the distribution today, Marshi worries about the impact of the blow-up of an individual company or of wider credit issues when the next economic downturn hits.
- Other large players today: Ares Capital (ARCC +0.8%), FS Investment (FSIC), American Capital (ACAS +1.4%), Apollo Investment (AINV +0.4%), Main Street Capital (MAIN +0.1%).
- ETFs: BDCL, BDCS, BIZD
May 7, 2014, 4:28 PM
- Pretax NOI of $16M or $0.06 per share falls 69% from Q4.
- Book value per share of $19.29 up $0.32 from the end of Q4.
- 8.9M shares repurchased at average price of $15.38 each. Repurchases have stopped as company retains Goldman to advise on splitting ACAS's investments and asset management businesses.
- CC tomorrow at 11 ET
- Previously: American Capital beats by $0.05, misses on revenue
- ACAS +2.5% AH
American Capital Ltd., a business development company, invests in public and private middle market companies located in North America and Europe with minimum EBITDA of $4 million and an enterprise value of $20 - $500 million. The fund targets companies operating in the fields of manufacturing,... More
Industry: Asset Management
Country: United States
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