American Capital Invests in ASAP - Analyst Blog

By Zacks | February 11, 2013 AAA

On Friday, American Capital Ltd. (ACAS) declared its investment of $89 million, committed in Dec 2012, in the One Stop Buyout of ASAP Industries, LLC. The deal was conducted by American Capital Energy and Infrastructure Group, a unit of American Capital. The company invested in the form of senior debt, subordinated debt and equity.  

American Capital anticipates the deal to be accretive based on its returns and expects to continue seeking new One-Stop Buyout opportunities or supporting private equity buyout.

Based in Houma, La., ASAP leads the Gulf Coast region in providing high-pressure flow control products world-wide for the oil and gas industry. Additionally, the company acts as a partner for original equipment manufacturers, oilfield service companies and equipment rental companies throughout the U.S. Moreover, ASAP provides products to small local operations to major oilfield services companies and original equipment manufacturers.

Therefore, the deal with ASAP will be a strategic fit for American Capital as the company's portfolio of domestic mid-market energy-related companies will be expanded and benefited from the deep-rooted customer relations and huge organic growth opportunities of ASAP. Notably, since the inception of American Capital Energy and Infrastructure Group in 2005, the unit has invested about $620 million in domestic mid-market energy-related companies.

American Capital has the capability to provide flexible financing solutions ranging from a variety of senior debt and uni-tranche to mezzanine and equity co-investments. Further, the company provides multi-currency funding with underwriting platform globally and facilitates the growth of portfolio companies. Such benefits induce private equity clients to consider it as an investment partner, which in turn helps the company broaden itself.

Among peers, companies in the same industry with Zacks Rank #1 (Strong Buy) include Medallion Financial Corp. (TAXI), ICG Group Inc. (ICGE) and KCAP Financial Inc. (KCAP).

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