Main Street Capital Corporation completed a full exit of its debt and equity positions in KBK Industries, a manufacturer of fiberglass and steel tanks, realizing a $17.3 million gain on the equity stake and having received $25.1 million in dividends over the 20‑year holding period.
The investment began in January 2006 with $5.75 million of first‑lien, senior‑secured term debt and a $0.25 million minority equity stake. Over the life of the investment Main Street added $9.9 million in additional debt and $0.4 million in equity, bringing total debt commitments to $15.6 million and total equity to $0.7 million. The $17.3 million realized gain represents a 127.2% internal rate of return on the equity investment and a 3.5× money‑in‑money return when debt, warrants and equity are combined.
KBK Industries was acquired by TerraVest Industries for $90 million in cash, a transaction that underscores the strategic fit between the two companies and highlights the value that Main Street Capital can unlock in lower‑middle‑market businesses. The exit demonstrates Main Street’s disciplined approach to sourcing, structuring, and managing long‑term investments that generate substantial capital appreciation.
In its most recent quarterly reporting, Main Street Capital posted net investment income of $86.5 million, distributable net investment income of $92.7 million, and total investment income of $139.8 million, with a net asset value of $32.78 per share. The proceeds from the KBK exit add to the firm’s overall portfolio performance and support its continued focus on high‑quality, lower‑middle‑market opportunities.
The $17.3 million gain and the strong return metrics reinforce Main Street Capital’s track record of delivering significant upside to investors while maintaining a conservative leverage profile, positioning the firm to pursue additional attractive investments in the same market segment.
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