LMS Capital sells Penguin Computing – LMS Capital says that San Francisco Equity Partners Fund 1 has received proceeds from the sale of its investment in Penguin Computing, Inc.
Penguin supplies enterprise and high performance computing and cloud computing solutions, principally in North America. LMS owns its interest via its holding in San Francisco Equity Partners Fund 1 and through a directly held co-investment. The company’s combined interest amounts to approximately 19% of the equity of Penguin.
At 31 March 2018 LMS reported a carrying value of GBP1.7 million for its directly held co-investment and GBP10.9 million for the interest held via SFEP 1. Penguin holdings represented 20.9% of the company’s estimated net asset value at 31 March 2018.
Penguin has been acquired by Smart Global Holdings, Inc., a US quoted company providing specialist solutions to the computing, networking, communications, storage, mobile and industrial markets. (For Smart’s announcement see www.smartgh.com ).
The acquisition price was up to $85 million, which includes $25 million of performance based payments that are made if certain agreed upon targets are achieved during Penguin’s financial year ending 31 December 2018. In addition to the performance related element of the acquisition price there are also amounts from the price retained in escrow, and released subject to satisfaction of certain conditions.
LMS has not yet received a formal distribution notice from the general partner of SFEP 1, nor has it received sufficient details of the transaction, including details of the conditions attaching to the performance related element of the price, to enable it accurately to assess the impact on the net asset value.
The general partner has however indicated that initial proceeds to LMS are likely to amount to around 60% of the carrying value of Penguin holdings, and that release of the escrow plus payments under the performance related element of the price could allow the company to receive proceeds equal to its carrying value, or possibly a small premium, during the first half of 2019.
LMS : LMS Capital sells Penguin Computing