MSC Income Fund Nets $11.6M Gain with 40.1% IRR on Centre Technologies Equity Exit
MSIF•MSC Income Fund realized an $11.6 million gain on its $1.6 million equity investment in Centre Technologies Holdings following a majority recapitalization, along with $0.5 million in dividends. The exit delivered a 40.1% IRR and an 8.8x return on equity, and a 23.2% IRR with a 2.4x total return.
1. Investment Partnership and Financing
MSC Income Fund initially invested $0.6 million via a revolving line of credit, $3.1 million first lien term loan and $1.5 million direct equity in Centre Technologies Holdings in January 2019 alongside Main Street Capital, followed by $6.9 million additional debt and $0.1 million equity to support seven follow-on acquisitions and growth initiatives.
2. Exit Transaction and Proceeds
The fund exited its debt and equity positions upon Centre’s majority recapitalization with a new financial sponsor, realizing an $11.6 million gain on its equity investment and receiving a minority equity stake in the acquirer, in addition to $0.5 million in dividends over the investment period.
3. Strong Returns Delivered
On its equity investment, the fund achieved a 40.1% internal rate of return and an 8.8x money multiple, while the combined debt and equity investments produced a 23.2% IRR and a 2.4x total money multiple since the initial January 2019 investment.
