ACAS Offers Mezzanine Financing - Analyst Blog
27 8월 2011 - 12:53AM
Zacks
Yesterday, American Capital Ltd. (ACAS)
announced its plan of providing support to the merger of Survey
Sampling International and Opinionology Inc. through financing. The
company strategizes to provide $50 million of Senior Subordinated
Note financing for the deal.
The new company will be named as Survey Sampling International
after the merger. Since December 2006, ACAS has been supporting
Opinionology Inc. with the finance. The company provided $34
million Second Lien Term Loan as part of the acquisition financing
for Sterling Investment Partners.
New Survey Sampling International provides sampling, data
collection and data analytic solutions for survey research
globally. Through various means including internet, telephone,
mobile/wireless, SSI communicates with respondents in 72 countries.
Other value-added services include programming and hosting,
questionnaire design session, online custom reporting and data
processing.
ACAS is a publicly traded private equity firm and global asset
manager. The company directly and through its asset management
business, initiates, underwrites and manages investments in middle
market private equity, leveraged finance, real estate and
structured products.
ACAS has the capability of providing flexible financing
solutions with a variety of senior debt and uni-tranche to
mezzanine and equity co-investments. Further, ACAS provides
multi-currency funding with underwriting platform globally and
facilitating growth of portfolio companies. All these benefits of
ACAS urges private equity clients to consider it as an investment
partner, which in turn, helps in the growth of the company.
Earnings Recap
ACAS’s second-quarter 2011 operating income of 20 cents per
share was in line with the Zacks Consensus Estimate. However,
results outpaced the prior-year quarter’s earnings of 9 cents per
share. The favorable outcome was due to a drop in operating
expenses, though partially offset by a decline in interest and
dividend income in the reported quarter.
ACAS’s asset coverage ratio increased to 376% from 336% in the
prior quarter. The company repaid an additional $100 million in
debt, strengthening its balance sheet.
ACAS’s successful restructuring of debt provided it with
sufficient operating flexibility. Moreover, the company also
continues to derisk its balance sheet through a number of
initiatives including repayment of debt. However, we believe
limited accessibility to capital and increased funding costs have
weakened the company’s strategic position in its sector.
The resumption of dividend payments is not expected in the near
term, given projections for capital losses. Moreover, the improved
credit quality of the portfolio is expected to continue along with
the economic recovery.
American Capital currently retains its Zacks #3 Rank, which
translates into a short-term Hold rating. Considering the
fundamentals, we are maintaining our long-term Neutral
recommendation on the stock. Major competitor of ACAS, Ares
Capital Corporation (ARCC) also retains Zacks #3 Rank.
AMER CAP LTD (ACAS): Free Stock Analysis Report
ARES CAP CP (ARCC): Free Stock Analysis Report
Zacks Investment Research
American Capital Strategies (NASDAQ:ACAS)
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