Kabam Position Sold in Private Transaction to Investment Fund
GREENWOOD VILLAGE, Colo.--(BUSINESS WIRE)--
Venture, Inc., (“BDCA Venture”) (Nasdaq: BDCV) announced today that
it has completed the disposition of its entire position in Kabam, Inc.
(“Kabam”) through a private sale to an investment fund on July 31, 2014.
BDCA Venture is a closed-end fund that has elected to be regulated as a
business development company under the Investment Company Act of 1940.
BDCA Venture invested $1,328,860 in Kabam’s $86 million Series D
convertible preferred stock financing in August 29, 2011. Kabam develops
and publishes free-to-play core video games on mobile devices and the
Internet. As a result of the private sale of its Kabam interest, BDCA
Venture generated net proceeds of $2,000,000 and a realized gain of
$671,140. As of June 30, 2014, the fair value of the Kabam position was
recorded at $1,930,000.
BDCA Venture’s sale of its entire Kabam position represented a return
multiple of 1.5x its investment cost over a holding period of
approximately 2.9 years. This represents a gross internal rate of
return, or IRR, on this investment of approximately 15.0% per year.1
The sale of the Kabam position is the fifth complete exit, out of a
total of 22 portfolio company investments, for BDCA Venture.
Additionally, three other portfolio companies (Millennial Media, Tremor
Video and TrueCar) are publicly traded.
Taking into account the Kabam disposition, BDCA Venture has generated
net realized gains of approximately $1,960,000 during 2014. BDCA Venture
has paid first and second quarter 2014 dividends of $0.10 per share each
quarter, totaling approximately $1,920,000 through June 30, 2014. A
third quarter 2014 dividend of $0.10 per share will be paid on September
18, 2014, to stockholders of record on August 11, 2014. Consistent with
BDCA Venture’s current distribution policy, quarterly distributions are
paid in cash or shares of common stock at the election of stockholders,
subject to a limitation that no more than 25% of the aggregate
distribution will be paid in cash with the remainder paid in shares of
BDCA Venture’s common stock.
“On the one hand, Kabam’s fundamental performance has been solid, with
2013 revenue of $360 million as reported by Kabam’s management, and the
recent announcement of a $120 million strategic investment from Alibaba
Group Holding Ltd. providing another validation point of the success of
the company’s business model,” stated Timothy J. Keating, CEO of BDCA
“On the other hand, our private-to-public arbitrage model requires
discipline and is predicated on being able to achieve internal rates of
return consistent with return multiples of 2x our investment cost over
expected holding periods of four years. When we believe that our holding
periods may be longer than our model expectation, we have to carefully
evaluate the return (and internal rate of return) trade-off between
realizing a gain today compared to a potential larger gain in the
future. In the case of Kabam, and given BDCA Venture’s mandate, we
determined that disposing of the position now was in the best interest
of our stockholders,” added Mr. Keating.
1Portfolio company returns are calculated at the portfolio
company level (net of any selling expenses, including broker
commissions); however, these returns do not reflect any of BDCA
Venture's operating expenses.
These returns represent historical results. Past performance is not a
guarantee of future results.
About BDCA Venture, Inc.
BDCA Venture, Inc. (www.BDCV.com)
is a closed-end fund regulated as a business development company under
the Investment Company Act of 1940 that specializes in making pre-IPO
investments in emerging growth companies that are committed to and
capable of becoming public. BDCA Venture provides investors with the
ability to participate in a publicly traded fund that allows its
stockholders to share in the potential value accretion that BDCA Venture
believes typically occurs once a company transforms from private to
public status. BDCA Venture’s shares are listed on Nasdaq under the
ticker symbol “BDCV.”
To be added to BDCA Venture’s email distribution list to receive
quarterly newsletters and other announcements, please visit our website
This press release may contain statements of a forward-looking nature
relating to future events.These forward-looking statements are
subject to the inherent uncertainties in predicting future results and
conditions.These statements reflect BDCA Venture’s current
beliefs, and a number of important factors could cause actual results to
differ materially from those expressed in this press release, including
the factors set forth in “Risk Factors” set forth in BDCA Venture’s Form
10-K and Form 10-Q filed with the Securities and Exchange Commission
(“SEC”), and subsequent filings with the SEC.Please refer to
BDCA Venture’s SEC filings for a more detailed discussion of the risks
and uncertainties associated with its business, including but not
limited to the risks and uncertainties associated with investing in
micro- and small-cap companies.Except as required by the federal
securities laws, BDCA Venture undertakes no obligation to revise or
update any forward-looking statements, whether as a result of new
information, future events or otherwise.The reference to BDCA
Venture’s website has been provided as a convenience, and the
information contained on such website is not incorporated by reference
into this press release.
BDCA Venture, Inc.
Investor Relations Contact:
L. Blackwell, 720-889-0133
Investor Relations Director
Source: BDCA Venture, Inc.