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MVC Capital Announces Sale Of Dakota Growers To Viterra For $18.28 Per Common Share

MVC Capital, Inc. (NYSE: MVC) (the "Fund"), a publicly traded business development company that makes private debt and equity investments, today announced that its portfolio company, Dakota Growers Pasta Company, Inc. (“Dakota Growers”) has signed a definitive merger agreement with Viterra Inc. (TSX: VT) (“Viterra”), Canada’s leading agri-business that provides premium quality ingredients to leading global food manufacturers, pursuant to which a subsidiary of Viterra will acquire all of the outstanding shares of Dakota Growers, a leading producer and marketer of dry pasta products in North America. The all-cash transaction, structured as a tender offer followed by a merger of a Viterra subsidiary and Dakota Growers, has been unanimously approved by the Boards of Directors of both companies.

The transaction represents a total enterprise value of USD$240 million, which includes equity value and anticipated net cash/debt at closing, subject to certain adjustments for transaction costs and other closing adjustments. Dakota Growers reported revenues and EBITDA of approximately USD$275 million and USD$42 million respectively for the latest twelve months ended October 31, 2009. As further described below, the anticipated gross proceeds of approximately $38 million to the Fund resulting from this transaction would exceed the Fund’s current carrying value of its investment in Dakota Growers.

Under the terms of the agreement, Viterra will commence a tender offer to acquire all of the outstanding shares of Dakota Growers’ common stock at a price of $18.28 per share, a premium of 6.2% to the Fund’s carrying value as of its quarter end January 31, 2010. The anticipated proceeds to the Fund will result in a six-year IRR of 27.7% including dividends received and fees earned over the life of the investment. The acquisition is expected to close shortly after completion of a tender of a majority (50.1%) of the outstanding shares of Dakota Growers common stock, the receipt of various regulatory approvals and the satisfaction of other customary closing conditions and contingencies. Taking into account the receipt of the sale proceeds upon the closing of the transaction and based on the Fund's current position, the Fund's debt, net of cash, would be approximately zero.

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