A Medical Device Daily

American Capital (Bethesda, Maryland) reported that on September 15, it completed the sale of its portfolio company Axygen BioScience (Union City, California) including its subsidiaries Axygen and Sorenson BioScience (Salt Lake City, Utah), to Corning (Corning, New York) for nearly $400 million.

The total inception to date gain and income, including dividend and fee income, from the equity invested by American Capital's affiliated funds under management was $102 million, representing a 25% compounded annual rate of return. American Capital received $182 million in proceeds and realized a gain of $35 million from the transaction, subject to post-closing adjustments.

American Capital's total inception to date realized gains on this investment were $36 million and its compounded annual rate of return, including interest and fees earned over the life of its investment was 22%. Including investments in Axygen BioScience by American Capital's affiliated funds under management, the inception to date realized gains were $61 million and the compounded annual rate of return was 22%.

The proceeds received by American Capital were less than the second quarter 2009 valuation of the investment by $1 million, or less than 1%.

"Since the beginning of the fourth quarter of 2008, we've received approximately $875 million of proceeds from realizations of portfolio investment repayments and exits, including over 20 exits of portfolio companies," said Darin Winn, senior VP and senior managing director."

Warrin added that "We are particularly pleased that all of our exits of control companies have been at enterprise multiples equal to or higher than our entry multiples."

The Union City, California-based company will be integrated into Corning's Life Sciences unit. Corning expects the deal to help the unit's revenue grow to more than $500 million by 2011.

"Over our three year investment in Axygen Bioscience, we have developed a great partnership with the management team and assisted in adding value to the company, enabling it to surpass its competition through growth and acquisitions," said Frank Do, Managing Director, Buyouts.

He added that"We are extremely proud of the company's improvements and success, which made it an attractive purchase for Corning Incorporated."

Axygen BioScience is a manufacturer and distributor of life sciences plastic consumables, liquid handling products and bench-top laboratory equipment.