BUFFALO, N.Y.--(BUSINESS WIRE)--Rand Capital Corporation (Nasdaq: RAND)), a business development company, today announced that it recently funded an initial investment in Caitec Inc., a rapidly growing provider of specialty pet products. Rand invested $3.5 million through a 14% subordinated secured note and an additional $300,000 in Class A Preferred stock.
Allen F. (“Pete”) Grum, President and Chief Executive Officer, noted, “The investment in Caitec represents a key transition point for Rand, as it represents one of the largest initial financings into a business in our history. While the investment follows our long-standing model of investing in quality management teams, the growth stage nature and size of this investment make this financing stand out. The debt portion of the investment will provide approximately $490,000 of income to Rand annually. This illustrates our strategy to transform into an income producing BDC, while also continuing our longstanding capital appreciation strategies through the equity co-investment in the business. We feel that this investment provides the best attributes of strong current income combined with the potential for long-term capital gain. We are pleased to support Caitec’s growth strategy as it expands its product offerings and channels to market.” Rand participated in this financing with Fairchild Capital Partners, LLC.
Caitec, based in Halethorpe, Maryland, is a leading manufacturer and distributor of toys for dogs, various products for pet birds, and other supplies for the burgeoning pet industry. The Company’s products are offered globally via a variety of sales channels, including national and local pet retailers, mass and regional retailers, grocery stores, and e-commerce. Caitec offers products through their own proprietary brands, as well as private label brands. The Company’s brands include Hero, Chase ‘N Chomp, Featherland Paradise, Oven Fresh Bites, Nature’s Instinct, and TitanEze.
Rand’s investment objective is to focus primarily on income accreting investments as it deploys $22 million of available liquidity.
ABOUT RAND CAPITAL
Rand Capital (Nasdaq: RAND) is an externally-managed Business Development Company (BDC) with a wholly-owned subsidiary licensed by the U.S. Small Business Administration (SBA) as a Small Business Investment Company (SBIC). The Company’s investment objective is to maximize total return to its shareholders with current income and capital appreciation by focusing its debt and related equity investments in privately-held, lower middle market companies with committed and experienced managements in a broad variety of industries. Rand invests in early to later stage businesses that have sustainable, differentiated and market-proven products, revenue of more than $2 million and a path to free cash flow or up to $5 million in EBITDA. The Company’s investment activities are managed by its external investment adviser, Rand Capital Management, LLC. Additional information can be found at the Company’s website where it regularly posts information: https://www.randcapital.com/.
