Rand Capital Announces Sale of Its Innov-X Systems, Inc. Securities Resulting From Olympus Corporation Acquisition
July 19 2010 - 4:23PM
- Investment provided 4.75X return since initial 2004
investment
- Total return exceeds 80%
- Estimated proceeds from sale may exceed $5.6
million
- Rand previously recognized gain of $2.3 million in 2006
from recapitalization
- Employment grows 8X over period of
investment
- Revenues increase 10X over period of
investment
Rand Capital Corporation (Nasdaq:RAND) ("Rand"), a business
development company (BDC) that provides capital for small to
medium-sized private companies, announced that it has sold/redeemed
its investment holdings in
Innov-X Systems, Inc.,
(Woburn, MA) (www.innovx.com).
Innov-X had been
acquired on July 1, 2010 by Olympus NDT Corporation, (Waltham, MA)
(www.olympus-ims.com) and will be a consolidated subsidiary of
Tokyo, Japan based Olympus Corporation.
Innov-X built a global business as a developer,
manufacturer and supplier of portable X-ray fluorescence (XRF)
analyzers that are used to determine the types and amounts of
elements that make up objects. This non-destructive technology
provides a quick and accurate way to carry out elemental analyses
of a variety of substances, including solids, powders and liquids.
Innov-X's 2009 revenues were
previously disclosed by Olympus as $40 million.
Rand's first investment in Innov-X was in 2004,
subsequent to which Rand made additional financings to the Company
in 2005, 2006, and 2009. Rand's total investment into the
company was approximately $1.9 million in the form of several
debentures and equity financings.
Daniel Penberthy, Rand's Executive Vice President and also a
member of the Board of Directors of Innov-X
stated: "We enjoyed working with Innov-X, and its
talented CEO, Mr. Donald Sackett, who was able to both share his
vision for the Company and execute on the original business
plan. Since the time of our initial investment,
Innov-X has increased its employment base and
Revenues, which are two important financial metrics and goals of
the Small Business Investment Company (SBIC) program through which
we receive our funding." He continued, "As
Innov-X grew and achieved critical milestones in
its business, Rand and its venture financing partners, Summit
Partners (Boston, MA) and CEI Ventures Inc., (Portland, ME), were
able to finance its growth."
Rand had valued its Innov-X Securities at $5.5
million at March 31, 2010, and will recognize an estimated realized
gain from the sale of its equity securities of approximately $4.4
million during the third quarter of 2010.
Rand had previously reported a realized gain of $2.3 million in
2006, resulting from the partial sale of its
Innov-X holdings, resulting from a minority equity
recapitalization financing involving Summit Partners.
Allen F. Grum, President of Rand Capital, stated "We were
pleased with our exit from Innov-X Systems,
Inc. This was the largest exit from Rand Capital SBIC
and had an IRR in excess of 80%."
Safe Harbor
Statement
Information contained in this release, other than historical
information, should be considered forward-looking, and may be
subject to inherent uncertainties in predicting future results and
conditions. These statements reflect the Corporation's current
beliefs and are subject to a number of risk-factors, including:
general economic conditions which affect Rand and our portfolio
companies' operations; valuation and illiquid nature of the
portfolio investments; high degree of risk from investing in
private companies; the regulated environment in which we operate;
the amount of debt resulting from borrowing funds from the SBA;
dependency upon key management for investment decisions; and the
competitive market for investment opportunities and fluctuations in
quarterly results. Please see the Corporation's Form 10-Q,
Item 1A, previously filed with the Securities and Exchange
Commission for a detailed discussion of the risks and uncertainties
associated with the Corporation's business. Except as
otherwise required by Federal securities laws, Rand Capital
Corporation and Rand Capital SBIC, Inc. undertakes no obligation to
update or revise forward-looking statements for new events and
uncertainties.
ABOUT RAND CAPITAL
Rand Capital is a publicly held Business Development Company
(BDC), and its wholly owned subsidiary is licensed by the Small
Business Administration (SBA) as a Small Business Investment
Company (SBIC). Rand and its subsidiary provide capital and
managerial expertise to small and medium sized private companies
primarily located in the Northeast U.S. Rand is traded on the
NASDAQ under the symbol "RAND". Rand is headquartered in
Buffalo, NY. www.randcapital.com
ABOUT OLYMPUS NDT
Olympus NDT is a world leading manufacturer of innovative non
destructive testing instruments, and is located in Waltham, MA.
CONTACT: Rand Capital Corporation
Investor Contact:
Daniel P. Penberthy, Executive Vice President
716.853.0802
dpenberthy@randcapital.com
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