Gladstone Investment Corporation Exits its Investment in Nth Degree, Inc.
Rhea-AI Summary
Gladstone Investment (Nasdaq:GAIN) has announced the sale of its portfolio company Nth Degree, Inc. to Shamrock Capital, resulting in a significant capital gain on its remaining equity position. Gladstone Investment initially acquired Nth Degree in 2015, sold a majority stake in 2019, and made additional investments in 2023. Nth Degree, based in Duluth, GA, is a leading provider of exhibit management and event services globally.
Mitchell Grant, Director of Gladstone Investment, expressed pride in supporting Nth Degree's growth. David Dullum, President of Gladstone Investment, highlighted that this marks the 31st exit from their management supported buy-outs since 2005, emphasizing their strategy of realizing gains on equity while generating strong current income from debt investments.
Positive
- Realized significant capital gain on remaining equity position in Nth Degree
- Successfully exited 31 management supported buy-outs since 2005
- Strategy of realizing gains on equity while generating strong current income from debt investments
Negative
- None.
Insights
The sale of Nth Degree represents a significant exit for Gladstone Investment (GAIN). While specific financial details aren't disclosed, the mention of a "significant capital gain" suggests a positive outcome for GAIN's shareholders. This aligns with GAIN's strategy of realizing gains on equity investments while generating income from debt investments.
The exit from Nth Degree marks GAIN's 31st successful buyout exit since 2005, demonstrating a track record of profitable investments. This consistent performance could enhance investor confidence in GAIN's business model and management capabilities. The transaction also frees up capital for new investments, potentially driving future growth.
Investors should note GAIN's focus on lower middle market businesses and its dual approach of equity appreciation and dividend growth. This strategy aims to provide both capital gains and steady income, which could be attractive in the current market environment.
This exit showcases the value creation potential in private equity investments in the lower middle market. Gladstone's initial acquisition in 2015, partial exit in 2019 and subsequent reinvestment in 2023 demonstrate a flexible approach to portfolio management. The ability to support Nth Degree's acquisition of Exposition Holdings indicates GAIN's capacity to facilitate growth through add-on acquisitions.
The success of this investment underscores the importance of patient capital and active management in private equity. GAIN's long-term partnership with Nth Degree (2015-2024) allowed for significant value creation through both organic growth and strategic acquisitions. This approach can be particularly effective in the lower middle market, where there's often more room for operational improvements and strategic repositioning.
For investors, this exit reinforces the potential of BDCs like GAIN to generate attractive returns through a combination of current income and capital appreciation.
MCLEAN, VA / ACCESSWIRE / September 16, 2024 / Gladstone Investment Corporation (Nasdaq:GAIN) ("Gladstone Investment") announced today the sale of its portfolio company Nth Degree, Inc. ("Nth Degree") to Shamrock Capital. As a result of this transaction, Gladstone Investment realized a significant capital gain on its remaining equity position. Gladstone Investment originally acquired Nth Degree in 2015, sold a majority of its equity position in 2019, and subsequently invested additional equity and debt in 2023 to facilitate Nth Degree's acquisition of Exposition Holdings, LLC d/b/a Fern Exposition Services.
Nth Degree, headquartered in Duluth, GA, is a market-leading provider of exhibit management services and event services to clients across the globe.
"Gladstone Investment has enjoyed a strong partnership with Nth Degree and its talented management team over many years. We are proud to have supported the business through a period of transformation and growth, both organically and through acquisition," said Mitchell Grant, Director of Gladstone Investment. "The entire Nth Degree management team has achieved outstanding results in growing the business and we wish them continued success."
"With the sale of Nth Degree and from inception in 2005, we have exited 31 of our management supported buy-outs, generating significant net realized gains on these investments," said David Dullum, President of Gladstone Investment. "Our fund strategy is to realize gains on equity, while also generating strong current income during the investment period from debt investments alongside our equity investments. This provides meaningful value to our shareholders with potential stock appreciation and dividend growth."
Gladstone Investment is a publicly traded business development company that seeks to make equity and secured debt investments in lower middle market businesses in the United States in connection with acquisitions, changes in control and recapitalizations. Additional information on the transaction can be found at www.gladstoneinvestment.com.
For Investor Relations inquiries related to any of the monthly dividend paying Gladstone funds, please visit www.gladstonecompanies.com.
Forward-looking Statements:
The statements in this press release regarding the longer-term prospects of Gladstone Investment, Nth Degree and their management teams, and the ability of Gladstone Investment and Nth Degree to grow and expand are "forward-looking statements." These forward-looking statements inherently involve certain risks and uncertainties in predicting future results and conditions. Although these statements are based on Gladstone Investment's current plans that are believed to be reasonable as of the date of this press release, a number of factors could cause actual results and conditions to differ materially from these forward-looking statements, including those factors described from time to time in Gladstone Investment's filings with the Securities and Exchange Commission. Gladstone Investment undertakes no obligation to update or revise these forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.
For further information: Gladstone Investment Corporation, (703) 287-5893
SOURCE: Gladstone Investment Corporation
View the original press release on accesswire.com
FAQ
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