Back in the day, Battery Solutions was an underperforming portfolio company of Alcentra, a BDC since acquired by Crescent Capital (CCAP). At its worst point, Alcentra/CCAP had nearly $5mn invested at cost in subordinated debt and preferred, the latter discounted by (78%). Even as recently as the IIIQ 2021, the preferred and debt were both discounted and rated CCR 3.
However, in the IVQ 2021 CCAP valued the preferred at a premium of 43% all of a sudden and the debt outstanding almost at par. We now know why: Battery Solutions has been sold to Retriev Technologies, according to the Lancaster Gazette. Terms were not disclosed, but we get the impression CCAP has booked itself a realized gain in the IQ 2021 of about $1.5mn above the $5.5mn invested at cost as of the IVQ 2021.
That’s a positive outcome for the Crescent organization, and for an investment that was first booked by the late Alcentra way back in 2014 and has suffered through plenty of ups and downs. We’ll be interested to see if CCAP is in any way involved in Retriev’s financing package or whether the investment is truly off the books. IQ 2022 results should tell the story.