American Capital, and affiliate European Capital, will eliminate 110 jobs and close two offices in light of current economic and market conditions.
The firm issued a statement late last night saying the cuts represented a reduction of roughly 19 percent of its US and European workforce.
It did not provide specific details as to which positions would be cut, nor which offices would be closed. It said the “cost-saving measures” included the elimination of certain office functions and other undisclosed measures at some of the 11 offices around the world that will remain open.
A spokeswoman declined to comment beyond the statement.
“We are operating in an unprecedented market environment,” the firm’s chairman and chief executive, Malon Wilkus, said in the statement. “While we continue to be one of the leading investors in the risk capital of middle market companies and continue to produce substantial net operating income, we are not investing at the rates we have in the past and therefore need to size our operations to our current volume of business.”
Last month the firm said it would pay roughly $158 million via stock swaps to de-list European Capital, its London Stock Exchange-traded affiliate that has seen share price drop and trade at a significant discount to net asset value. As of 30 June, European Capital’s NAV had dropped 19 percent from 31 December, to €7.87 per share.
The de-listing plan was revealed in the firm’s third quarter earnings report, which detailed a $701 million third quarter loss. Ratings agency Standard & Poor’s reacted by downgrading the S&P 500 firm and putting it on a negative watch.
Yesterday the firm’s stock price hit $3.70 per share, a 52-week low, and closed at $3.84 per share. Its 52-week high, achieved in December 2007, was $38.63, while its 2007 peak, hit in February 2007, was $49.63 per share.
American Capital said it has approximately $17 billion in capital resources under management and more than 290 portfolio companies. It has invested roughly $5.6 billion year to date.