American Capital Sheds Avalon Laboratories – Analyst Blog

Shares of American Capital, Ltd. ( ACAS ) jumped 1.72% on Friday, following the divesture of its portfolio company Avalon Laboratories Holding Corp. to Nordson Corp. ( NDSN ). Notably, Nordson is a world-leading precision fluid dispensing systems manufacturer.

The company and its affiliated fund - American Capital Equity III, LP (ACE III) -- received $180 million for the deal. The company has earned 19% compounded annual rate of return over the life of its investment, including dividends and fees.

Based in Los Angeles, Avalon designs and manufactures highly-specialized, single-use catheters and specialty medical tubing products for cardiology, pulmonology and related applications. Primary customers for the company include OEM customers in the cardiology, pulmonology, endovascular, bariatrics, tracheostomy, endoscopy, non-vascular stent and ophthalmic market segments.

Avalon was the first exit for ACE III. In spite of the global recession, the company recorded a solid financial performance, generating double-digit annual revenue and EBITDA growth.

American Capital directly and through its asset management business initiates, underwrites and manages investments in middle-market private equity, leveraged finance, real estate and structured products. Since its IPO in 1997 through the second quarter of 2014, the company has earned a 23% compounded annual return on the exit of its equity investments, including dividends, fees and net gains.

American Capital carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the same industry include Medallion Financial Corp. ( TAXI ) and Apollo Investment Corp. ( AINV ). Both companies carry a Zacks Rank #2 (Buy).

AMER CAP LTD (ACAS): Free Stock Analysis Report

NORDSON CORP (NDSN): Free Stock Analysis Report

APOLLO INV CP (AINV): Free Stock Analysis Report

MEDALLION FINL (TAXI): Get Free Report

Excerpt from:
American Capital Sheds Avalon Laboratories - Analyst Blog