Prospect Capital Corporation (NASDAQ:PSEC) announced that Prospect has recently been repaid its $72.7 million debt investment in Ryan, LLC (“Ryan”) and its $23.6 million debt investment in TB Corporation (“Taco Bueno”). Prospect realized an 18.0% internal rate of return (“IRR”) and 1.4 times cash-on-cash return on its investment in Ryan, and Prospect realized a 15.8% IRR and 1.4 times cash-on-cash return on its investment in Taco Bueno.
Headquartered in Dallas, Texas, Ryan specializes in tax advisory services for Fortune 500 companies. Ryan’s primary business segments involve auditing various state, local, excise, and property tax filings and analyzing tax overpayments and other matters for its clients. Prospect made its initial investment in Ryan in December 2012 to support Ryan’s acquisition of Property Tax Services from Thompson Reuters.
“The Ryan transaction demonstrates Prospect’s strength in originating successful direct investments in management-owned companies using our proprietary methods and capabilities,” said Richard Carratu, a Managing Director of Prospect Capital Management L.P. “Ryan further highlights our strategy of investing in market leaders and working with management teams to build larger, more efficient, and higher-quality businesses through organic and acquisition-driven growth.”
With a 48 year history, Taco Bueno owns and operates a chain of quick service restaurants offering fast, casual, and quality Mexican cuisine within its core markets of Texas and Oklahoma. Prospect made its initial investment in Taco Bueno in December 2012 to support a recapitalization of the company. Taco Bueno is owned by Palladium Equity Partners (“Palladium”), a leading private equity firm based in New York.
“We have been impressed with the drive and focus of the Taco Bueno senior management team under Palladium’s leadership,” said Richard Carratu. “We look forward to teaming up with Palladium on future transaction opportunities.”
Prospect closed approximately $2.0 billion of new originations in the twelve months ended June 30, 2015 and has a robust pipeline of new origination opportunities. (Original Source)
Shares of Prospect Capital closed yesterday at $7.23. PSEC has a 1-year high of $10.98 and a 1-year low of $7.01. The stock’s 50-day moving average is $7.28 and its 200-day moving average is $7.78.
On the ratings front, Prospect Capital has been the subject of a number of recent research reports. In a report issued on July 1, Cantor Fitzgerald analyst David Chiaverini initiated coverage with a Hold rating on PSEC and a price target of $8, which implies an upside of 10.7% from current levels. Separately, on May 7, MLV & Co.’s Christopher Nolan maintained a Buy rating on the stock and has a price target of $9.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, David Chiaverini and Christopher Nolan have a total average return of 8.0% and -8.1% respectively. Chiaverini has a success rate of 63.8% and is ranked #886 out of 3729 analysts, while Nolan has a success rate of 28.3% and is ranked #3537.
Prospect Capital Corporation is a closed-end investment company. It invests in senior and subordinated debt and equity of companies in need of capital for acquisitions, divestitures, growth, development, recapitalizations and other purposes.