Portman Ridge Finance Corporation (NASDAQ: PTMN) (the “Company” or
“PTMN”) announced today the closing of the previously announced
merger with Harvest Capital Credit Corporation (formerly NASDAQ:
HCAP) (“HCAP”). The combined company, which will remain externally
managed by Sierra Crest Investment Management LLC (“Sierra Crest”),
an affiliate of BC Partners Advisors L.P. (“BC Partners”), is
expected to have total assets of approximately $614 million and net
asset value of approximately $268 million after closing.
As a result of the merger, HCAP stockholders
will receive, in the aggregate:
- a cash payment from Sierra Crest of
$2.15 million, or approximately $0.36 per share of HCAP common
stock, plus
- aggregate merger consideration from
PTMN composed of (i) approximately $18.5 million in cash and (ii)
approximately 15.3 million shares of PTMN common stock.
With respect to the merger consideration from
PTMN, HCAP stockholders were entitled, with respect to all or any
portion of the shares of HCAP common stock they held as of the
effective time of the merger, to elect to receive the merger
consideration in the form of cash (an “Election”) or PTMN common
stock, subject to certain conditions and limitations in the merger
agreement. Accordingly, as a result of the Elections received from
HCAP stockholders and any resulting adjustment under the terms of
the merger agreement, each share of HCAP common stock with respect
to which an Election was validly submitted (an “Electing Share”)
will receive, in aggregate, approximately $7.43 in cash and 0.74
shares of PTMN common stock, while each non-Electing Share of HCAP
common stock will receive, in aggregate, approximately 3.86 shares
of PTMN common stock. Pursuant to the terms of the merger
agreement, 475,806 Electing Shares were converted to non-Electing
Shares in order to ensure that the value of the aggregate cash
consideration paid by PTMN to holders of the Electing Shares
equaled the aggregate cash consideration that HCAP received from
PTMN.
The merger received solid support from the HCAP
stockholder base, with over 96% of the voting stockholders
approving the transaction. As of closing, PTMN and HCAP
stockholders owned approximately 83.4% and 16.6%, respectively, of
the combined company. In connection with the merger, Joseph Jolson,
Chairman and CEO of HCAP and HCAP’s largest non-institutional
stockholder, accepted merger consideration comprised solely of PTMN
common stock and agreed not to transfer his PTMN shares received in
the merger for 90 days post-closing to facilitate liquidity for
other stockholders.
Ted Goldthorpe, President and CEO of PTMN and
Head of BC Partners Credit commented, “We are very pleased to close
the merger with Harvest Capital highlighting the continued
execution of our strategy in targeting attractive consolidation
opportunities that result in earnings accretion to stockholders. As
in past transactions, we expect that stockholders will benefit from
the operational and cost synergies driven by lower financing costs,
a lower blended fee structure, a reduction in public company costs
per share and an increased trading liquidity in the equity. The
addition of the Harvest Capital assets is in line with our
long-term objective of building a diversified portfolio of
high-quality directly originated senior secured debt investments
and we look forward to continuing to execute on this strategy.”
Simpson Thacher & Bartlett LLP served as
counsel to PTMN. Keefe, Bruyette & Woods, A Stifel Company
served as financial advisor to the Special Committee of HCAP’s
Board of Directors. Dechert LLP served as counsel to HCAP and to
the Special Committee of HCAP’s Board of Directors.
About Portman Ridge Finance
Corporation
Portman Ridge Finance Corporation (NASDAQ: PTMN)
is a publicly traded, externally managed investment company that
has elected to be regulated as a business development company under
the Investment Company Act of 1940. Portman Ridge Finance
Corporation’s middle market investment business originates,
structures, finances and manages a portfolio of term loans,
mezzanine investments and selected equity securities in middle
market companies. The Company’s investment activities are managed
by its investment adviser, Sierra Crest Investment Management LLC,
an affiliate of BC Partners Advisors L.P.
Portman Ridge Finance Corporation's filings with
the Securities and Exchange Commission (the “SEC”), earnings
releases, press releases and other financial, operational and
governance information are available on the Company's website at
www.portmanridge.com.
About BC Partners Advisors L.P. and BC
Partners Credit
BC Partners is a leading international
investment firm with over $40 billion of assets under management in
private equity, private credit and real estate strategies.
Established in 1986, BC Partners has played an active role in
developing the European buyout market for three decades. Today, BC
Partners executives operate across markets as an integrated team
through the firm's offices in North America and Europe. Since
inception, BC Partners has completed 117 private equity investments
in companies with a total enterprise value of €149 billion and is
currently investing its eleventh private equity fund. For more
information, please visit www.bcpartners.com.
BC Partners Credit was launched in February 2017
and has pursued a strategy focused on identifying attractive credit
opportunities in any market environment and across sectors,
leveraging the deal sourcing and infrastructure made available from
BC Partners.
Cautionary Statement Regarding
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. The matters discussed in this
press release, as well as in future oral and written statements by
management of Portman Ridge Finance Corporation, that are
forward-looking statements are based on current management
expectations that involve substantial risks and uncertainties which
could cause actual results to differ materially from the results
expressed in, or implied by, these forward-looking statements.
Forward-looking statements relate to future events or our future
financial performance and include, but are not limited to,
projected financial performance, expected development of the
business, plans and expectations about future investments and the
future liquidity of the Company. We generally identify
forward-looking statements by terminology such as “may,” “will,”
“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”
“target,” “projects,” “outlook”, “contemplates,” “believes,”
“estimates,” “predicts,” “potential” or “continue” or the negative
of these terms or other similar words. Forward-looking statements
are based upon current plans, estimates and expectations that are
subject to risks, uncertainties and assumptions. Should one or more
of these risks or uncertainties materialize, or should underlying
assumptions prove to be incorrect, actual results may vary
materially from those indicated or anticipated by such
forward-looking statements.
Important assumptions include our ability to
originate new investments, and achieve certain margins and levels
of profitability, the availability of additional capital, and the
ability to maintain certain debt to asset ratios. In light of these
and other uncertainties, the inclusion of a projection or
forward-looking statement in this press release should not be
regarded as a representation that such plans, estimates,
expectations or objectives will be achieved. Important factors that
could cause actual results to differ materially from such plans,
estimates or expectations include, among others,
(1) uncertainty of the expected financial performance of the
Company; (2) expected synergies and savings associated with the
transaction in which Harvest Capital Credit Corporation merged with
and into the Company; (3) the ability of the Company and/or BC
Partners to implement its business strategy; (4) evolving
legal, regulatory and tax regimes; (5) changes in general
economic and/or industry specific conditions; (6) the impact
of increased competition; (7) business prospects and the
prospects of the Company’s portfolio companies;
(8) contractual arrangements with third parties; (9) any
future financings by the Company; (10) the ability of Sierra
Crest Investment Management LLC to attract and retain highly
talented professionals; (11) the Company’s ability to fund any
unfunded commitments; (12) any future distributions by the
Company; (13) changes in regional or national economic conditions,
including but not limited to the impact of the COVID-19 pandemic,
and their impact on the industries in which we invest; and (14)
other changes in the conditions of the industries in which we
invest and other factors enumerated in our filings with the SEC.
The forward-looking statements should be read in conjunction with
the risks and uncertainties discussed in the Company’s filings with
the SEC, including the Company’s most recent Form 10-K, Form 10-Q
and other SEC filings. We do not undertake to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required to be
reported under the rules and regulations of the SEC.
Contacts:
Portman Ridge Finance Corporation650 Madison
Avenue, 23rd floorNew York, NY 10022info@portmanridge.com
Jason Roosjason.roos@bcpartners.com(212)
891-5007
Jeehae LinfordThe Equity Group
Inc.jlinford@equityny.com(212) 836-9615
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