MCG Capital Corporation (Nasdaq: MCGC) (“MCG”) announced today that it
signed a definitive agreement to sell its equity investment in Coastal
Sunbelt, LLC for approximately $15.5 million and to provide debt
financing to support the acquisition of Coastal Sunbelt Holding, Inc.
(“Coastal”) by its management team and MSouth Equity Partners, L.P.
MCG’s net cash proceeds after providing additional financing will be
approximately $15.3 million. In January 2007, MCG made its original
equity investment in Coastal and provided debt financing. The cost and
fair value of MCG’s equity investment in Coastal Sunbelt, LLC as of
March 31, 2009 was $15.0 million and $15.6 million, respectively. Final
closing of the transaction is subject to customary closing conditions
and is expected to occur in mid-August 2009.
“MCG has enjoyed working with a talented team at Coastal, which has done
a terrific job of building a strong platform for future growth,” said
Doug Gilbert, Managing Director at MCG. “We look forward to our
continued involvement as a lender to Coastal.”
“This equity sale, to be consummated at approximately 99% of the
previously-reported fair value, is another step forward in our strategic
plan to preserve liquidity and deleverage the balance sheet as we
monetize assets at or near their fair value," said Steven F. Tunney,
MCG’s President and CEO.
Coastal is an independent distributor of wholesale and fresh-cut produce
to restaurants, institutions and grocery stores in the Washington,
DC/Baltimore metropolitan area.
About MCG Capital Corporation
MCG Capital Corporation is a solutions-focused commercial finance
company providing capital and advisory services to middle-market
companies throughout the United States. Our investment objective is to
achieve current income and capital gains. Our capital is generally used
by our portfolio companies to finance acquisitions, recapitalizations,
buyouts, organic growth and working capital. For more information,
please visit www.mcgcapital.com.
Forward-looking Statements:
Statements in this press release regarding management’s future
expectations, beliefs, intentions, goals, strategies, plans or
prospects, including statements relating to MCG’s current strategic
plan, including the preservation of liquidity and deleveraging its
balance sheet, and its ability to monetize assets at or near their fair
value may constitute forward-looking statements for purposes of the safe
harbor protection under applicable securities laws. Forward-looking
statements can be identified by terminology such as “anticipate,”
“believe,” “could,” “could increase the likelihood,” “estimate,”
“expect,” “intend,” “is planned,” “may,” “should,” “will,” “will
enable,” “would be expected,” “look forward,” “may provide,” “would” or
similar terms, variations of such terms or the negative of those terms.
Such forward-looking statements involve known and unknown risks,
uncertainties and other factors including those risks, uncertainties and
factors referred to in MCG’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2009 filed with the Securities and Exchange
Commission under the section “Risk Factors,” as well as other documents
that may be filed by MCG from time to time with the Securities and
Exchange Commission. As a result of such risks, uncertainties and
factors, actual results may differ materially from any future results,
performance or achievements discussed in or implied by the
forward-looking statements contained herein. MCG is providing the
information in this press release as of this date and assumes no
obligations to update the information included in this press release or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
MCG Capital Corporation
Marshall Murphy, 703-562-7110
MMurphy@MCGCapital.com
