The Fund invested approximately $15.5 million in Vitality through the life of the investment beginning in September 2004. As of the last quarterly Valuation Committee Meeting held in late October 2009, the Fund’s Valuation Committee placed a total value of the Fund’s portion of the Company at $27.8 million, which is approximately $3.1 million less than the gross proceeds to be received assuming the full payment of the escrow and cost of the European operations.
With the closing of the transaction, the Fund may explore several uses for the gross proceeds including reducing its outstanding debt, buying back shares of the Fund as well as redeployment of capital into investments.
“The exit value of $30.9 million, taking into account the full value of the escrow and cost of the European operations, represents an increase of $3.7 million over the value of the investment at the time the Fund received the offer from Nestlé,” said Michael Tokarz, Chairman and Portfolio Manager of MVC. “This sale exemplifies the Fund’s ongoing efforts to generate value for its shareholders, despite a generally challenging M&A market. We are constantly reviewing our portfolio to uncover ways to increase liquidity assuming the timing is appropriate, while also recognizing growth opportunities for our existing companies.”
IRR of just over 10% is NOT very good for this type of investment. On a portfolio basis, MVC sh/get return in the range of 25%. This includes any losers that any firm inevitably has. If this is a "successful investment" for MVC, I would not own MVC.