MONTCLAIR, N.J., (GLOBE NEWSWIRE) -- 180 Degree Capital Corp. (NASDAQ:TURN) announced today that one of its privately held life science portfolio companies has entered into a definitive agreement to be acquired by an undisclosed party. The transaction is currently expected to close in mid-to-late May 2020.
The terms of the acquisition are confidential. 180 notes, however, that upon closing, it will receive approximately $4.4 million in cash for its position in the company. Approximately $400,000 in additional proceeds will be held in escrow for one year. 180 will also be eligible to receive up to approximately $81 million in potential future payments upon the achievement of undisclosed development and commercial milestones. 180 currently estimates that the first milestone payment could occur in 2-3 years, and subsequent milestone payments could occur at various points over the subsequent 10-15 years. The timing and likelihood of the acquirer achieving these milestones is highly uncertain and if these milestones are achieved, the timing may be materially different than current estimates. These factors will be used to develop a fair market value based on a probability-weighted net present value analysis of the potential future milestone payments as of 180's next valuation date, which is June 30, 2020. In addition, simultaneous with the close of the transaction, the company will spin out certain assets into a new entity. 180 will own shares of this new entity. 180’s securities of this privately held life science portfolio company were fair valued as of March 31, 2020, at approximately $2.2 million.
“The closing of the sale of this privately held life science portfolio company will be a very meaningful event for TURN and its shareholders,” said Kevin M. Rendino, Chief Executive Officer of 180. “As long as the transaction closes as expected, we currently expect a 4x to 5x increase to the value of this company in Q2 2020. We congratulate the management team of this company for their hard work and dedication that led to this positive outcome for all of its shareholders, including 180.”
About 180 Degree Capital Corp.
180 Degree Capital Corp. is a publicly traded registered closed-end fund focused on investing in and providing value-added assistance through constructive activism to what we believe are substantially undervalued small, publicly traded companies that have potential for significant turnarounds. Our goal is that the result of our constructive activism leads to a reversal in direction for the share price of these investee companies, i.e., a 180-degree turn. Detailed information about 180 and its holdings can be found on its website at www.180degreecapital.com.
