Main Street Capital Corporation Announces Strategic Investment in UBM ParentCo, LLC
Main Street Capital Corporation (NYSE: MAIN) has completed a significant investment of $50.8 million in UBM ParentCo, LLC, known as United Business Mail (UBM). This funding aims to facilitate UBM's merger with Mystic Logistics Holdings, LLC, an existing portfolio company. The deal involved a strategic collaboration with the owners and management of both entities, enabling Main Street to exit its previous equity and debt investments in Mystic.
Details of the Investment in UBM
The recent financing mark a shift in Main Street’s portfolio strategy. The investment comprises a mix of first lien, senior secured term debt and direct minority equity in UBM. This transaction positions Main Street as a lender and minority equity holder in UBM, further aligning with its goal to support promising growing businesses.
- Investment Amount: $50.8 million
- Type of Investment: Combination of secured term debt and equity
- Strategic Outcome: Exit from Mystic Logistics Holdings
Overview of UBM and Mystic Logistics
UBM is recognized as a leading provider of "marketing mail" commingle services. The company specializes in optimizing postage and logistics for large-scale mailers, enhancing their operational efficiency and speed-to-market. UBM’s nationwide logistics network, coupled with technological tools, offers clients improved visibility and cost management across their marketing mail initiatives.
On the other hand, Mystic Logistics focuses on marketing mail consolidation and logistics solutions that support precise, date-driven in-home delivery performance. The company's disciplined approach to transportation planning and performance tracking enables clients to successfully align marketing campaigns with specific delivery windows, ensuring optimal client engagement.
Financial Metrics and Gains from Mystic Logistics
Main Street’s previous engagement with Mystic Logistics began in August 2014, involving a majority recapitalization that included initial investments of $10 million in a secured term loan and $2.7 million in equity. Over the years, Mystic grew significantly, thanks to its expanding customer base and robust partnerships.
Upon exiting its equity investment, Main Street realized a substantial gain of $23.8 million. Throughout the investment period, Main Street also received total dividends of $22.1 million, culminating in an impressive annual internal rate of return (IRR) of 32.9% and a money invested (TMI) return of 17.9 times on its equity investment. When aggregating both debt and equity results, the IRR reached 22.9% with a cumulative TMI return of 5.1 times.
About Main Street Capital Corporation
Main Street Capital Corporation is a principal investment firm that focuses on providing long-term debt and equity capital solutions primarily to lower middle-market companies. The company engages in investments that support management buyouts, recapitalizations, growth financing, refinancings, and acquisitions across various sectors. Main Street operates with the goal of building partnerships with business owners, offering tailored financial solutions that cater to their specific needs.
Main Street also oversees an asset management business through its subsidiary, MSC Adviser I, LLC, which manages investments for external parties, registered under the Investment Advisers Act of 1940.