8 Announced or Completed Liquidity Events Quarter-to-Date Q4 2013
4 Portfolio Companies Currently in IPO Registration
Quarter-to-date Q4 2013 Closed Commitments of ~$121.0 million
Quarter-to-date Q4 2013 Unscheduled Early Repayments of ~$71.0
Year-to-date 2013 Closed Commitments of ~$700.5 million
PALO ALTO, Calif.--(BUSINESS WIRE)--
Technology Growth Capital, Inc. (NYSE: HTGC), the leading specialty
finance company focused on providing senior secured loans to venture
capital-backed companies in technology-related markets, including
technology, biotechnology, life science, and energy and renewables
technology industries, at all stages of development, today announced its
quarter-to-date Q4 2013 portfolio update.
Citing the buoyant market for public equities, the Company said five
Hercules portfolio companies have successfully completed IPOs in 2013
and four additional portfolio companies have filed Registration
Statements for a potential IPO. The Company also noted that M&A activity
within its portfolio has been even more robust with the acquisition of
19 Hercules portfolio companies during this past year.
"2013 has been an exciting year for Hercules, punctuated by a record
number of liquidity events within our investment portfolio," said Manuel
A. Henriquez, co-founder, chairman and chief executive officer of
Hercules. "We are proud to be the venture debt lender of choice for so
many promising and innovative venture capital-backed, entrepreneurial
Portfolio gains and record growth in Net Investment Income led to an
increased dividend in every quarter of 2013. Hercules' shares have
generated total returns of approximately 60%+ YTD, when including
dividend payments and stock appreciation through mid-December 2013. The
Company's market cap now exceeds $1.0 billion, and is expected to finish
2013 with a strong liquidity position of more than $300 million to
pursue new investment as it enters into 2014.
"These liquidity events, which enhanced our already strong liquidity
position, coupled with the BBB+ (investment grade) rating Kroll assigned
to Hercules' bonds have culminated in strong total shareholder returns
for our investors.
"In early December, Hercules celebrated its 10th anniversary.
We have now completed approximately $4.0 billion in commitments to over
260 innovative, venture- backed companies since inception, demonstrating
our leadership position as one of the largest and well-capitalized BDCs
focused on the venture capital marketplace," Henriquez continued. "To
deploy this liquidity, the Company has been actively building its team
of investment professionals, adding five senior executives in just the
past few months, opening a new office in New York City, and expanding
our California and Virginia offices. The significant depth of
experience, out-of-the-box entrepreneurial thinking and hard work of our
team will continue to help drive Hercules to new heights within the BDC
sector in 2014 and beyond."
New Originations for Quarter-to-Date Q4 2013:
As of December 19, 2013, Hercules has originated approximately $121.3
million of debt and equity commitments to new and existing portfolio
Hercules has made new commitments to the following six companies,
assisting in their future growth and development.
$20.0 million commitment to Celsion Corporation, an
oncology company developing improved cancer treatments based on its
proprietary heat-activated liposomal drug delivery technology.
$15.0 million commitment to Baxano Surgical Inc., a
medical device company providing a suite of minimally invasive
products used to treat degenerative conditions of the spine affecting
the lumbar region.
$15.0 million commitment to ViewRay Inc., a medical
device company that is developing a simultaneous MRI-guided adaptive
radiation therapy technology for the treatment of cancer.
$12.5 million commitment to NetBio Inc., a commercial
DNA analysis company providing a full set of technologies, products,
and services used in the emerging field of Rapid DNA Analysis (RDNA).
$10.0 million commitment to InspireMD Inc., an
innovative medical device company focusing on developing and
commercializing its proprietary embolic protection stent platform
$4.0 million commitment to Dance BioPharm Inc., a
biotechnology company focused on the development of inhaled insulin
products to treat diabetes.
In addition, Hercules provided approximately $44.8 million of debt and
equity commitments and renewals to existing portfolio companies.
It is important to note that certain commitments may expire without
being drawn upon, and commitments do not necessarily represent future
cash requirements or future earning assets for Hercules. Our commitments
may include conditions, such as reaching certain milestones, before the
Hercules debt commitment would become available. Hercules is instituting
more funding or performance based milestone requirements to mitigate
risk which will affect our actual funding levels.
As of December 19, 2013, Hercules received approximately $108.0
million in principal repayments, of which approximately $71.0 million
were unscheduled early repayments.
Portfolio Company Liquidity Events for Quarter-to-Date Q4 2013:
Quarter-to-date, eight (8) Hercules portfolio companies have announced
or completed liquidity events, such as an IPO or M&A event.
1. As previously reported, Western Digital Corp (NASDAQ: WDC) completed
its acquisition of Hercules portfolio company Virident Systems, Inc.
This liquidity event represents a net gain of approximately $7.5
million, an internal rate of return of 76.5% (excluding proceeds in
escrow) and a gross multiple of 2.5x on Hercules' total investment in
Virident Systems, Inc.
2. As previously reported, EnerSys (NYSE: ENS) completed its acquisition
of Hercules portfolio company Purcell Systems, Inc. This
liquidity event represents a net gain of approximately $617,000, an
internal rate of return of 15.6% (excluding proceeds in escrow), and a
gross multiple of 6.0x on Hercules' total investment in Purcell Systems,
3. As previously reported, Biomet, Inc. completed its acquisition of
Hercules portfolio company Lanx, Inc. This liquidity event
represents a net gain of approximately $1.9 million, an internal rate of
return of 32.1% (excluding proceeds in escrow), and a gross multiple of
2.3x on Hercules' total investment in Lanx, Inc.
4. In October 2013, SAP completed its acquisition of Hercules portfolio
company KXEN, Inc. This liquidity event represents a net gain of
approximately $70 thousand, an expected internal rate of return of 13.0%
(excluding proceeds in escrow), and an expected gross multiple of 2.5x
on Hercules' total investment in Kxen, Inc.
5. In December 2013, Cumulus Media completed its acquisition of Hercules
portfolio company WestwoodOne, Inc., previously known as Dial
Global, for cash and the retirement of approximately $215.0 million in
6. In December 2013, Hercules portfolio company OCZ Technology Group,
Inc. entered Chapter 11 bankruptcy proceedings and entered into an
Asset Purchase Agreement with Toshiba, Inc. As of December 19, 2013,
Hercules has already received approximately $9.0 million in proceeds as
loan repayment from our original loan of $10.0 million, excluding fees
and interest, and the Company's remaining exposure to this company is
approximately $1.0 million, excluding fees and interest.
7. In December, Endo Health Solutions Inc. (NASDAQ: ENDP) announced that
it has entered into a definitive agreement to acquire Hercules'
portfolio company NuPathe Inc. (NASDAQ: PATH) for $105.0 million
in cash. In addition to the upfront cash payment, NuPathe shareholders
will receive rights to receive additional cash payments of up to $3.15
per share if specified net sales of NuPathe's migraine treatment ZECUITY
are achieved over time. The transaction is subject to customary closing
There can be no assurances that these companies will complete their
respective mergers and acquisitions in a timely manner or at all.
Quarter-to-date, one (1) of Hercules' portfolio companies completed an
1. In October 2013, ADMA Biologics, Inc. (OTCBB: ADMA) completed
its initial public offering of 3,352,941 shares of its common stock at
$8.50 per share.
Current Companies in IPO Registration:
As of December 19, 2013, Hercules had warrant positions in four (4)
portfolio companies that had filed Registration Statements in
contemplation of a potential IPO:
Four companies filed confidentially under the Jobs Act.
There can be no assurances that these companies will complete their IPOs
in a timely manner or at all.
About Hercules Technology Growth Capital, Inc.:
Hercules Technology Growth Capital, Inc. (NYSE: HTGC) is the leading
specialty finance company focused on providing senior secured loans to
venture capital-backed companies in technology-related markets,
including technology, biotechnology, life science, and energy and
renewables technology industries, at all stages of development. Since
inception (December 2003), Hercules has committed more than $4.0 billion
to over 260 companies and is the lender of choice for entrepreneurs and
venture capital firms seeking growth capital financing.
Hercules' common stock trades on the New York Stock Exchange under the
ticker symbol "HTGC."
In addition, Hercules has two outstanding bond issuances of 7.00 percent
Senior Notes due 2019—the April 2019 Notes and September 2019
Notes—which trade on the NYSE under the symbols "HTGZ" and "HTGY,"
Companies interested in learning more about financing opportunities
should contact firstname.lastname@example.org, or call
Statements in this press release 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," "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, without limitation, those
risks, uncertainties and factors referred to in the "Risk Factors"
section of the Hercules Annual Report on Form 10-K for the year ended
December 31, 2012, as well as the other documents and reports filed by
Hercules with the Securities 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. Hercules 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.
Hercules Technology Growth Capital, Inc.
Ed Keaney, 415-445-3236
Source: Hercules Technology Growth Capital, Inc.
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