Main Street Capital Expands Portfolio with Strategic Investments
Main Street Capital Corporation (NYSE: MAIN) is excited to share its recent move in the investment sphere. The company has successfully completed a significant new portfolio investment, allocating $50.8 million to UBM ParentCo, LLC. This move is designed to facilitate UBM's merger with an existing portfolio player, Mystic Logistics Holdings, LLC.
In this collaborative effort, Main Street joined forces with the management teams and owners of both UBM and Mystic. The investment from Main Street comprises a mix of first lien, senior secured term debt and minority equity direct investment. This strategic move not only strengthens UBM’s operations but also allows Main Street to fully exit its previous investments in Mystic. Going forward, Main Street will serve as a lender and minority equity stakeholder in UBM.
UBM is recognized as a frontrunner in providing marketing mail commingle services. The company specializes in optimizing postage, transportation, and delivery performance for large-scale mailers. Utilizing an extensive nationwide logistics network combined with technology-driven processes, UBM enhances clients' marketing mail programs, aiming for improved speed-to-market and cost efficiency.
Conversely, Mystic has carved out its niche in providing marketing mail consolidation and logistics solutions. Their services are tailored to ensure precise delivery aligned with marketing campaigns. Their disciplined approach to transportation and mail flow optimization allows clients to achieve measurable outcomes.
Main Street embarked on its adventure with Mystic back in 2014, originally funding a majority recapitalization with a $10.0 million first lien term loan and a $2.7 million equity investment. Following this initial investment, Mystic saw impressive growth, bolstering its customer base and enhancing postal partnerships significantly.
The outcome of this investment journey for Main Street is commendable. The company reported an impressive realized gain of $23.8 million upon exiting its equity investment in Mystic. Moreover, throughout the investment’s life, Main Street received total dividends amounting to $22.1 million. This performance reflects an annual internal rate of return (IRR) of 32.9%, along with a 17.9 times money invested (TMI) return on equity. When considering the combined returns on both debt and equity investments, Main Street achieved an overall IRR of 22.9% and a TMI of 5.1.
About Main Street Capital Corporation
Main Street Capital Corporation presents itself as a principal investment firm focused on providing tailored long-term debt and equity capital solutions aimed at lower middle market companies. The firm primarily engages in debt financing for private companies, especially those owned by or being acquired by private equity funds.
Main Street prides itself on its diversified investment strategies, engaging in management buyouts, recapitalizations, growth financings, refinancings, and acquisitions across varied industry sectors. The firm aims to connect with entrepreneurs and management teams to provide effective financing solutions, ensuring a deep engagement in the lower middle market investment arena.
Through its wholly-owned portfolio company, MSC Adviser I, LLC, Main Street also maintains a robust asset management business, managing investments for external parties. This aspect of their operation functions under the regulations of the Investment Advisers Act of 1940, highlighting their commitment to adherence in investment management.
Contacts
For corporate inquiries, you can reach out to Dwayne L. Hyzak, CEO of Main Street Capital Corporation, or Ryan R. Nelson, CFO, via their office number. Additionally, investor relations queries can be directed to Ken Dennard or Zach Vaughan, who are also accessible through the Main Street contact channels.
Frequently Asked Questions
What is the main investment that Main Street recently made?
Main Street Capital made a $50.8 million investment in UBM ParentCo, LLC to support its merger with Mystic Logistics Holdings, LLC.
What services does UBM provide?
UBM specializes in marketing mail commingle services optimizing postage and delivery performance for large-scale mailers.
What was the realized gain from Main Street's investment in Mystic?
Main Street realized a gain of $23.8 million from its equity investment in Mystic Logistics Holdings upon exiting.
How does Main Street Capital support lower middle market companies?
Main Street provides customized long-term debt and equity capital solutions, focusing on buyouts, recapitalizations, and growth financing.
Who should be contacted for investor relations inquiries at Main Street?
Investor relations inquiries can be directed to Ken Dennard or Zach Vaughan at Main Street Capital Corporation.
