BUFFALO, N.Y. (WKBW) — Rand Capital, a Buffalo-based Business Development Company, announced a $25 million strategic investment by East Asset Management (EAM), owned by Terry and Kim Pegula.
Pending approval by shareholders and the U.S. Small Business Administration, the $25 million investment is in exchange for approximately 8.3 million shares of Rand Capital common stock.
EAM will hold approximately 57% of shares if the sale is approved, Rand will establish an external management structure as a result.
“We believe the strategic investment by East Asset Management into Rand is both a testament to the success of our organization and a transforming opportunity for future growth. The additional assets provide us greater scale with more income-producing instruments that are immediately accretive to net investment income, while the cash enhances our liquidity and enables further expansion of our investment portfolio. We also expect the externalization of management to reduce our expense-to-asset ratio, thereby improving our earnings power. Following the closing of the transactions, we intend to use cash and stock to pay a special dividend to shareholders and also intend to institute on-going cash dividends. The Board of Directors is unanimously recommending that shareholders approve the transactions.”
Erland (“Erkie”) Kailbourne, Chairman of the Board of Rand Capital
“Our investment in Rand demonstrates our confidence in the potential of the Company, as well as our continued dedication to Buffalo and Western New York. With additional capital resources, an enhanced investment team, streamlined operations and a shareholder-friendly structure, we are excited about Rand’s potential to deliver consistent shareholder value over time.”
Adam Gusky, Chief Investment Officer at East Asset Management
