BUFFALO, NY-Rand Capital Corp., a business development company (BDC) that provides capital for small to medium-sized private companies, announced that it has sold/redeemed its investment holdings in Innov-X Systems Inc., (Woburn, MA). Innov-X had been acquired on July 1, 2010 by Olympus NDT Corp., (Waltham, MA) and will be a consolidated subsidiary of Tokyo, Japan based Olympus Corp.
Innov-X built a global business as a developer, manufacturer and supplier of portable X-ray fluorescence (XRF) analyzers that are used to determine the types and amounts of elements that make up objects. This non-destructive technology provides a quick and accurate way to carry out elemental analyses of a variety of substances, including solids, powders and liquids. Innov-X's 2009 revenues were previously disclosed by Olympus as $40 million.
Rand's first investment in Innov-X was in 2004, subsequent to which Rand made additional financings to the Company in 2005, 2006, and 2009. Rand's total investment into the company was approximately $1.9 million in the form of several debentures and equity financings.
Daniel Penberthy, Rand's Executive Vice President and also a member of the Board of Directors of Innov-X stated: "We enjoyed working with Innov-X, and its talented CEO, Mr. Donald Sackett, who was able to both share his vision for the Company and execute on the original business plan. Since the time of our initial investment, Innov-X has increased its employment base and Revenues, which are two important financial metrics and goals of the Small Business Investment Company (SBIC) program through which we receive our funding." He continued, "As Innov-X grew and achieved critical milestones in its business, Rand and its venture financing partners, Summit Partners (Boston, MA) and CEI Ventures Inc., (Portland, ME), were able to finance its growth."
Rand had valued its Innov-X Securities at $5.5 million at March 31, 2010, and will recognize an estimated realized gain from the sale of its equity securities of approximately $4.4 million during the third quarter of 2010.
Rand had previously reported a realized gain of $2.3 million in 2006, resulting from the partial sale of its Innov-X holdings, resulting from a minority equity recapitalization financing involving Summit Partners.
Allen F. Grum, President of Rand Capital, stated "We were pleased with our exit from Innov-X Systems, Inc. This was the largest exit from Rand Capital SBIC and had an IRR in excess of 80%."