180 Degree Capital Corp. Life Science Portfolio Company Acquisition Closed
May 26 2020 - 9:00AM
180 Degree Capital Corp. (NASDAQ:TURN) (“180”) announced today that
the sale of one of its privately held life science portfolio
companies has closed, and that 180 has received its share of the
upfront payment of $4.4 million in cash. In addition, 180
received $305,000 in cash from its ownership in an entity
affiliated with the acquired life science portfolio company.
As noted in 180’s initial press release, the
terms of the acquisition are confidential. 180 notes, however, that
in addition to the up-front payments already received,
approximately $350,000 in additional proceeds is held in escrow for
one year from the date of the closing. 180 is also eligible,
through its ownership in the acquired company and the affiliated
entity, to receive up to approximately $87 million in potential
future payments upon the achievement of undisclosed development and
commercial milestones. 180 currently estimates that the first
milestone payment could occur in 2-3 years, and subsequent
milestone payments could occur at various points over the
subsequent 10-15 years. The timing and likelihood of the acquirer
achieving these milestones is highly uncertain, and if these
milestones are achieved, the timing may be materially different
than current estimates. These factors will be used to develop a
fair market value based on a probability-weighted net present value
analysis of the potential future milestone payments as of 180's
next valuation date, which is June 30, 2020. Preliminary valuation
work leads us currently to believe that the transaction could
result in an increase in value of approximately 5x from our $2.2
million value of this privately held life science portfolio company
as of March 31, 2020.
As of the close of the public markets on May 22,
2020, 180 had approximately $40.0 million in cash and securities of
publicly traded companies versus its $48 million market
capitalization.
“We are pleased that this sale is closed, and we
are now focused on deploying this cash in our public market
investment strategy,” said Kevin M. Rendino, Chief Executive
Officer of 180. “Additionally, taking into consideration our
currently estimated fair market value of the potential future
milestone payments from this transaction, our current stock price
reflects the rest of our private portfolio being valued at nearly
zero.”
About 180 Degree Capital
Corp.
180 Degree Capital Corp. is a publicly traded
registered closed-end fund focused on investing in and providing
value-added assistance through constructive activism to what we
believe are substantially undervalued small, publicly traded
companies that have potential for significant turnarounds. Our goal
is that the result of our constructive activism leads to a reversal
in direction for the share price of these investee companies, i.e.,
a 180-degree turn. Detailed information about 180 and its holdings
can be found on its website at www.180degreecapital.com.
Press Contact:
Daniel B. Wolfe
180 Degree Capital Corp.
973-746-4500
Forward-Looking Statements
This press release may contain statements of a
forward-looking nature relating to future events. These
forward-looking statements are subject to the inherent
uncertainties in predicting future results and conditions. These
statements reflect 180's current beliefs, and a number of important
factors could cause actual results to differ materially from those
expressed in this press release. Please see 180's securities
filings filed with the Securities and Exchange Commission for a
more detailed discussion of the risks and uncertainties associated
with 180's business and other significant factors that could affect
180's actual results. Except as otherwise required by Federal
securities laws, 180 undertakes no obligation to update or revise
these forward-looking statements to reflect new events or
uncertainties. The reference and link to the website
www.180degreecapital.com has been provided as a convenience, and
the information contained on such website is not incorporated by
reference into this press release. 180 is not responsible for the
contents of third-party websites.
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