MCLEAN, Va., April 4, 2011 /PRNewswire/ -- Gladstone
Investment Corporation (Nasdaq: GAIN) (the "Company") announced
today that on Friday, April 1, 2011,
it sold its equity investment in and received partial redemption of
its preferred stock, while investing new subordinated debt in,
Cavert II Holding Corporation ("Cavert") as part of a
recapitalization allowing Cavert's management team to acquire all
the remaining common equity from the Company. The net cash proceeds
to the Company from the sale of its equity in Cavert were
$5.6 million, resulting in a realized
gain of $5.5 million. At the
same time, the Company received $2.3
million in a partial redemption of its preferred stock,
received $0.7 million in preferred
dividends, and invested $5.7 million
in new subordinated debt of Cavert. In October 2007, the Company made its original
equity investment and provided debt financing in support of a
management-led buyout of Cavert.
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"We continue to be impressed with the results of Cavert and its
excellent management team, and are pleased that we have been able
to facilitate this change of ownership while maintaining
significant attractive yielding investments in Cavert," said
Dave Dullum, the Company's
President.
Cavert is the largest supplier of non-galvanized bailing wire in
the United States and produces an
array of wire products for the paper and paperboard recycling
industries.
Gladstone Investment Corporation is a publicly traded business
development company that seeks to make debt and equity investments
in small and mid-sized businesses in the
United States in connection with acquisitions, changes in
control and recapitalizations. The Company currently pays a monthly
dividend of four cents per share.
Additional information on this transaction can be found at
www.gladstonecompanies.com.
For Investor Relations inquiries related to any of the monthly
dividend paying Gladstone funds,
please visit www.gladstone.com.
Forward-looking Statements:
The statements in this press release regarding the results of
Cavert, its management team, and expected continued yielding
investments are "forward-looking statements." These forward-looking
statements inherently involve certain risks and uncertainties,
although they are based on the Company's current plans that are
believed to be reasonable as of the date of this press release.
Factors that may cause the Company's actual results to differ from
these forward-looking statements include, among others, the
duration and potential future effects of the current economic
downturn on its portfolio companies and on the senior loan market
and those factors listed under the caption "Risk Factors" of the
Company's Post-Effective Amendment No. 2 to the Registration
Statement on Form N-2 (No. 333-160720) as filed with the SEC
on November 22, 2010. The risk
factors set forth in the Form N-2 under the caption "Risk Factors"
are specifically incorporated by reference into this press release.
The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
SOURCE Gladstone Investment Corporation
