Allied Capital Corporation (NYSE:ALD) announced today that it has invested $83 million to support the buyout of DirectBuy, Inc. by private equity firm Trivest Partners, L.P. Allied Capital’s investment took the form of senior subordinated debt and an equity co-investment.
Founded in 1971, DirectBuy is the largest domestic franchisor of membership-based consumer buying centers in North America, overseeing 149 locations across the U.S and Canada and serving hundreds of thousands of members. DirectBuy offers its members the opportunity to purchase a wide selection of name-branded products at wholesale prices. System-wide purchases by DirectBuy members topped $700 million during 2007.
“We are pleased to support Trivest Partners in its acquisition of DirectBuy,” said Mike Grisius, Managing Director of Allied Capital. “The Trivest team has followed this company for a long time, and understands the keys to success in this business.” Mr. Grisius added that “Allied Capital has significant experience investing in the franchisor sector, which allowed us to identify the core strengths of the DirectBuy business, including its stable franchisee base, its compelling value proposition to both members and vendors, and its status as a category creator with no significant competitors of its size and scale.”
“Allied Capital was a true value-added financing partner, bringing a depth of experience in franchise financing, as well as a flexible balance sheet and certainty of execution to this deal,” said Troy Templeton, Managing Partner of Trivest Partners. “We look forward to working with the Allied team to create value for all stakeholders of the business.”
About Allied Capital
Allied Capital is a leading business development company (BDC) in the U.S. that invests private debt and equity capital in middle market businesses nationwide. Founded in 1958 and operating as a public company since 1960, Allied Capital has paid consistent or increasing regular, quarterly cash dividends annually to shareholders since 1963.
Allied Capital provides long-term debt and equity capital for management and sponsor-led buyouts, and for recapitalizations, acquisitions and growth of middle market companies. Allied Capital’s one-stop financing capabilities include first and second lien senior loans, unitranche debt, junior or subordinated debt and equity. Allied Capital seeks to invest in stable, less cyclical companies that produce significant free cash flow and high returns on invested capital. At September 30, 2007, the Company’s private finance portfolio included investments in 110 companies that currently generate aggregate revenues of over $13 billion and employ more than 90,000 people.
Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in its New York Stock Exchange-listed stock. Allied Capital invests in the American entrepreneurial economy by providing long-term capital and access to managerial resources often unavailable to middle market companies. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.
About DirectBuy, Inc.
Founded in 1971 and based in Merrilville, IN, DirectBuy is the oldest and largest domestic franchisor of membership-based consumer buying centers in North America, overseeing 149 locations across the U.S and Canada and serving hundreds of thousands of members. DirectBuy members gain access to a wide selection of name branded products at wholesale prices, resulting in average savings of 20% to 50% as compared to traditional retail purchases. The company’s vendor base consists of over 1,000 manufacturers across five primary product categories. During 2007, total system-wide purchases by DirectBuy members topped $700 million. For more information, please visit www.directbuy.com.
About Trivest Partners, LP
Trivest is a leading provider of equity for middle market corporate acquisitions, recapitalizations, and growth capital financings. Since its founding in 1981, Trivest has sponsored more than 140 acquisitions and recapitalizations, totaling in excess of $3.5 billion in value. The firm has over $600 million currently under management. For more information, please visit www.trivest.com.
Forward-Looking Statements
The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in Allied Capital’s filings with the Securities and Exchange Commission