Rand Capital Makes Largest Initial Funding of $3.8 Million with Caitec Inc.
November 17 2020 - 8:35AM
Business Wire
Rand Capital Corporation (Nasdaq: RAND) (“Rand”), a business
development company, today announced that it recently funded an
initial investment in Caitec Inc., a rapidly growing provider of
specialty pet products. Rand invested $3.5 million through a 14%
subordinated secured note and an additional $300,000 in Class A
Preferred stock.
Allen F. (“Pete”) Grum, President and Chief Executive Officer,
noted, “The investment in Caitec represents a key transition point
for Rand, as it represents one of the largest initial financings
into a business in our history. While the investment follows our
long-standing model of investing in quality management teams, the
growth stage nature and size of this investment make this financing
stand out. The debt portion of the investment will provide
approximately $490,000 of income to Rand annually. This illustrates
our strategy to transform into an income producing BDC, while also
continuing our longstanding capital appreciation strategies through
the equity co-investment in the business. We feel that this
investment provides the best attributes of strong current income
combined with the potential for long-term capital gain. We are
pleased to support Caitec’s growth strategy as it expands its
product offerings and channels to market.” Rand participated in
this financing with Fairchild Capital Partners, LLC.
Caitec, based in Halethorpe, Maryland, is a leading manufacturer
and distributor of toys for dogs, various products for pet birds,
and other supplies for the burgeoning pet industry. The Company’s
products are offered globally via a variety of sales channels,
including national and local pet retailers, mass and regional
retailers, grocery stores, and e-commerce. Caitec offers products
through their own proprietary brands, as well as private label
brands. The Company’s brands include Hero, Chase ‘N Chomp,
Featherland Paradise, Oven Fresh Bites, Nature’s Instinct, and
TitanEze.
Rand’s investment objective is to focus primarily on income
accreting investments as it deploys $22 million of available
liquidity.
ABOUT RAND CAPITAL
Rand Capital (Nasdaq: RAND) is an externally-managed Business
Development Company (BDC) with a wholly-owned subsidiary licensed
by the U.S. Small Business Administration (SBA) as a Small Business
Investment Company (SBIC). The Company’s investment objective is to
maximize total return to its shareholders with current income and
capital appreciation by focusing its debt and related equity
investments in privately-held, lower middle market companies with
committed and experienced managements in a broad variety of
industries. Rand invests in early to later stage businesses that
have sustainable, differentiated and market-proven products,
revenue of more than $2 million and a path to free cash flow or up
to $5 million in EBITDA. The Company’s investment activities are
managed by its external investment adviser, Rand Capital
Management, LLC. Additional information can be found at the
Company’s website where it regularly posts information:
https://www.randcapital.com/.
Safe Harbor Statement
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than historical facts, including but
not limited to statements regarding the effectiveness of Rand’s new
investment strategy; the ability to deploy its investment capital;
the competitive ability and position of Rand; and any assumptions
underlying any of the foregoing, are forward-looking statements.
Forward-looking statements concern future circumstances and results
and other statements that are not historical facts and are
sometimes identified by the words “may,” “will,” “should,”
“potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,”
“estimate,” “overestimate,” “underestimate,” “believe,” “could,”
“project,” “predict,” “continue,” “target” or other similar words
or expressions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove to be
incorrect, actual results may vary materially from those indicated
or anticipated by such forward-looking statements. The inclusion of
such statements should not be regarded as a representation that
such plans, estimates or expectations will be achieved. Important
factors that could cause actual results to differ materially from
such plans, estimates or expectations include, among others, (1)
evolving legal, regulatory and tax regimes; (2) changes in general
economic and/or industry specific conditions; and (3) other risk
factors as detailed from time to time in Rand ’s reports filed with
the Securities and Exchange Commission (“SEC”), including Rand’s
annual report on Form 10-K for the year ended December 31, 2019,
quarterly reports on Form 10-Q, and other documents filed with the
SEC. Consequently, such forward-looking statements should be
regarded as Rand’s current plans, estimates and beliefs. Except as
required by applicable law, Rand assumes no obligation to update
the forward-looking information contained in this release.
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version on businesswire.com: https://www.businesswire.com/news/home/20201117005317/en/
Company: Allen F. ("Pete") Grum President and CEO Phone:
716.853.0802 Email: pgrum@randcapital.com
Investors: Deborah K. Pawlowski Kei Advisors LLC Phone:
716.843.3908 Email: dpawlowski@keiadvisors.com
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