Allied Capital Sells Hillman Cos. for $510M

WASHINGTON, DC-District-based Allied Capital Corp., a financial entity billed as the largest business investment firm in the US that also invests in non-investment grade commercial mortgage-backed securities, will sell off the Hillman Cos. Inc. to Chicago-headquartered private equity company Code Hennessy & Simmons LLC. Allied, which acquired Hillman in 2001 when it purchased Hillman’s parent company SunSource Inc., has agreed to turn over ownership of the Cincinnati-based key making and hardware merchandise distributing company in exchange for a financial package valued at $510 million.

As part of the arrangement, Allied will be repaid for its outstanding mezzanine debt totaling $44 million. After all is said and done, the deal will yield $192 million in cash for the investment company. It is unclear how much, if any, of the funds will be directed toward the company’s CMBS activity. But the company’s relationship with Hillman will not exactly come to an end, as Allied has agreed to pony up $47.5 million in mezzanine financing for the hardware concern.