Meritus Ventures Announces Approval as Rural Business Investment Company and Commencement of Investment Activity

Wednesday September 27, 2006
Meritus Ventures, L.P. announced today that it has received final approval from the United States Department of Agriculture (USDA) and the United States Small Business Administration (SBA) as a Rural Business Investment Company (RBIC) under USDA’s Rural Business Investment Program (RBIP).

London, KY and Oak Ridge, TN – Meritus Ventures, L.P. announced today that it has received final approval from the United States Department of Agriculture (USDA) and the United States Small Business Administration (SBA) as a Rural Business Investment Company (RBIC) under USDA’s Rural Business Investment Program (RBIP).

Meritus Ventures is a private, for-profit, venture capital fund established to make equity investments in private companies in predominantly rural areas in southern and central Appalachia. The general partner of the fund is Eclipse Management, LLC. Meritus Ventures is managed by Ray Moncrief (President of Eclipse Management, LLC) and Grady Vanderhoofven (Executive Vice President of Eclipse Management, LLC). The fund has offices in London, KY and Oak Ridge, TN.

Meritus commences operations with approximately $36.5 million under management, one-third of which was raised as equity from private investors and two-thirds of which is private capital raised via the sale of debentures guaranteed by USDA. In addition to the equity Meritus will invest in companies, the Fund Managers have an additional $1 million available for “Operational Assistance.” The Fund Mangers can use the Operational Assistance funds to pay third-party service providers to provide services to Meritus’ portfolio companies. Meritus was able to acquire the Operational Assistance funds via a grant from USDA, and was able to access capital via the sale of the USDA-guaranteed debentures, because of the fund’s qualification as a RBIC. Meritus Ventures is currently the only operational RBIC in the United States.

As part of the announcement, Ray Moncrief stated, “The creation of the Rural Business Investment Company program is very timely because of the need that is expressed by the amount of deal flow that we are seeing from rural areas. This proves the point that quality private equity transactions can be done in non-traditional areas. It is important for Meritus to be successful in its investing activities because it will act as a conduit for traditional private equity into rural America. We have been very pleased with the level of support and professionalism displayed by everyone involved in the creation of Meritus Ventures, L.P.”

Grady Vanderhoofven said, “Meritus is the only venture fund in the country that explicitly and specifically targets investment in companies in rural areas in central and southern Appalachia. Meritus is the largest venture fund in this part of the country – the region between Cincinnati and Atlanta and between Nashville and Research Triangle Park.” He added, “Investing in this region of the country is a process that presents opportunities and challenges different than those found in traditional venture capital markets. We appreciate the support and confidence our investors, USDA, and SBA have demonstrated, and we are ready to begin investing this fund in exceptional companies in this region.”


About the Rural Business Investment Program – The U.S. Congress authorized the Rural Business Investment Program (RBIP) in the 2002 Farm Bill. The purpose of the RBIP is to promote economic development and to create wealth and job opportunities in rural areas by encouraging developmental venture capital investments primarily in smaller enterprises and by meeting the unmet equity capital needs of such businesses. The program is similar to existing SBA venture capital programs – specifically, the Small Business Investment Company (SBIC) and New Markets Venture Capital (NMVC) programs – and is intended to license Rural Business Investment Companies (RBICs) through a competitive process. (www.sba.gov/INV/RBIP)

About Meritus Ventures, L.P. – Meritus Ventures is currently the only Rural Business Investment Company (RBIC) in the United States. The $36M+ venture capital fund was formed to generate attractive returns for the fund’s investors while creating wealth and jobs in rural areas of central and southern Appalachia. In addition to providing equity capital, the fund may provide operational assistance to its potential and actual portfolio companies. For more details about the fund, visit www.meritusventures.com.

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