Gladstone Investment Sells Stake in Cavert Wire

Gladstone Investment Corp., a private equity firm headquartered in McLean, Va., recently sold its equity investment in the baling wire company Cavert Holding Corp., Rural Hall, N.C., and received partial redemption of its preferred stock, while investing new subordinated debt in Cavert II Holding Corp.

According to a Gladstone Investment release, the deal was done as part of a recapitalization program that allowed Cavert's management to acquire all the remaining common equity from Gladstone. The net cash proceeds to Gladstone from the sale of its equity in Cavert are $5.6 million, resulting in a realized gain of $5.5 million.

At the same time, Gladstone received $2.3 million in a partial redemption of its preferred stock, received $0.7 million in preferred dividends and invested $5.7 million in new subordinated debt of Cavert.

In October 2007, Gladstone made its original equity investment in Cavert Wire and provided debt financing to assist in the management-led buyout of the wire manufacturer.

In a release, Dave Dullum, president of Gladstone, says, "We continue to be impressed with the results of Cavert and its excellent management team, and are pleased that we have been able to facilitate this change of ownership, while maintaining significant attractive yielding investments in Cavert."

Cavert supplies non-galvanized bailing wire in the United States and produces an array of wire products for the paper and paperboard recycling industries.