Hercules Technology Growth Capital, Inc. (NYSE: HTGC), the
leading specialty finance company focused on providing senior
secured loans to venture capital-backed companies in
technology-related markets, including technology, biotechnology,
life science and cleantech industries, at all stages of
development, today announced its quarter-to-date fourth quarter
2012 portfolio update.
“2012 has been a tremendous year for Hercules in which we
executed across all areas of our business and clearly established
the company as the undisputed business development company (BDC)
leader in venture lending,” said Manuel A. Henriquez, Hercules
co-founder, chairman and chief executive officer. “2012 was marked
with numerous first-time achievements, ranging from completing our
first Moody’s-rated A2 (sf) securitization of $231.0 million with
net proceeds of approximately $129.0 million, to completing three
senior unsecured and unrated 7.0% seven-year bond offerings or our
first ‘baby bond’ capital raises totaling approximately $170.0
million, to executing two equity capital raises totaling
approximately $81.0 million, all while achieving portfolio and
earnings growth for our investors. We are very pleased that the
financial community continues to recognize the quality of our
portfolio, the caliber of our team, and our ability to identify
investment opportunites, which is all underscored by Moody’s A2
(sf) rating of our securitization.”
Henriquez continued, “Despite a turbulent and unpredictable
market triggered by post U.S. election uncertainty, the continued
Euro crisis and now the looming fiscal cliff, we continued to meet
the strong demand for venture lending from entrepreneurial
companies during the fourth quarter. However, as has been the case
through most of 2012, many of these commitments closed near the end
of the quarter. We do not expect the majority of the new fundings
to have a meaningful impact on our fourth quarter financial results
given the late close, but they should provide for a strong start to
2013.”
Q4 Quarter-to-Date Originations:
As of December 19, 2012, Hercules has originated
approximately $205.0 million of debt and equity commitments to new
and existing portfolio companies.
Hercules' new investment commitments include:
- $40.0 million to Merrimack
Pharmaceuticals (NASDAQ: MACK), a biopharmaceutical
company with an initial focus on cancer that is engaged in
discovering, developing and preparing to commercialize innovative
medicines that are paired with companion diagnostics for the
treatment of serious diseases.
- $34.0 million commitment to
Comverge, Inc., the leading provider of Intelligent Energy
Management solutions for Residential and Commercial &
Industrial (C&I) customers.
- $15.0 million commitment to
ShareThis, the largest platform for sharing and influence
across the web, reaching more than 600 million users across more
than two million websites.
- $14.5 million commitment to
WomensForum.com, an online media platform that delivers
women-focused content to its 20 million viewers.
- $10.0 million commitment to
Redwood Systems, the leading provider of
building-performance lighting solutions.
- $10.0 million commitment to
Identive Group (NASDAQ: INVE; Frankfurt: INV), a provider of
solutions and services for the identification, security and RFID
industries.
- $8.5 million commitment to
NuPathe, Inc. (NASDAQ: PATH), a specialty
pharmaceutical company focused on innovative neuroscience solutions
for diseases of the central nervous system including neurological
and psychiatric disorders.
- $6.0 million commitment to
Polyera, a leading supplier of advanced semiconductor
materials for the electronics industry including flat panel
displays.
- $1.0 million commitment to
Clustrix, the scale-out SQL database for Big Data
applications.
In addition, Hercules provided more than $65.0 million in new
commitments and renewals to existing portfolio companies.
Year-to-Date 2012 Total Commitments:
As of December 19, 2012, Hercules has closed total loan
commitments and renewals of approximately $581.0 million to new and
existing portfolio companies.
Current Signed Term Sheets: Future Portfolio Growth
Potential
As of December 19, 2012, Hercules has approximately $87.0
million in non-binding signed term sheets outstanding. These
non-binding term sheets generally convert to contractual
commitments in approximately 45-to-60 days from signing.
Non-binding outstanding term sheets are subject to completion of
Hercules' due diligence and final approval process as well as
negotiation of definitive documentation with the prospective
portfolio companies. It is important to note that not all
non-binding term sheets are expected to close and do not
necessarily represent future cash requirements. Closed Commitments
generally fund 70-80% of the committed amount in aggregate over the
life of the commitment.
Closed Commitments and Pending Commitments (in millions)
(see footnotes below)
January 1- September 30, 2012 Closed Commitments
$376.7 Q4 2012 Closed Commitments (as of
December 19, 2012) $204.5
Total year-to-date 2012 Closed Commitments(a)
$581.2 Pending Commitments (as
of December 19, 2012)(b) $87.0
Total year-to-date Closed and Pending Commitments
$668.2
(a.) Closed Commitments may include renewals of existing credit
facilities. Not all Closed Commitments result in future cash
requirements. Commitments generally fund over the two succeeding
quarters from close.
(b.) Not all Pending Commitments (signed non-binding term
sheets) are expected to close and do not necessarily represent any
future cash requirements.
Unfunded Commitments
As of December 19, 2012, Hercules had unfunded debt commitments
of approximately $89.0 million. Since these commitments may expire
without being drawn upon, unfunded commitments do not necessarily
represent future cash requirements or future earning assets for
Hercules. Approximately one third-to-one half of these unfunded
commitments are dependent upon the portfolio company reaching
certain milestones before the Hercules debt commitment would become
available.
Portfolio Company Liquidity Events Quarter-to-Date:
M&A
In November 2012, Pfizer Inc. (NYSE: PFE) closed its
acquisition of Hercules' portfolio company Nextwave
Pharmaceuticals for a total potential transaction value of
approximately $700.0 million.
In December 2012, Hercules' portfolio company deCODE Genetics
reached a definite agreement to be acquired by Amgen (NASDAQ: AMGN)
in a transaction valued at approximately $415.0 million, subject to
customary closing adjustments.
Current Companies in IPO Registration and Existing Warrant
Portfolio:
As of December 19, 2012, Hercules had warrant positions in more
than 120 different technology, life science and cleantech
companies, and three portfolio companies had filed Form S-1
Registration Statements in contemplation of a potential IPO:
1. iWatt, Inc.
2. Glori Energy, Inc.
3. Paratek Pharmaceuticals, Inc.
There can be no assurances that these companies will complete
their IPOs in a timely manner or at all.
Quarter-to-date, Fulcrum Bioenergy withdrew its Registration
Statement for its IPO.
Capital Raising Activities Quarter-to-Date:
On December 19, 2012, Hercules Capital Funding Trust 2012-1 LLC,
a newly-formed wholly owned subsidiary of Hercules, issued $129.0
million of Class A Notes (the Notes) rated A2 (sf) by Moody’s
Investors Service, Inc. (Moody's) backed by $231.0 million of
senior secured loans originated by Hercules. The Notes bear
interest at a fixed rate of 3.32%. The Notes will have a stated
maturity date of December 16, 2017 and an expected weighted average
life of 1.15 years.
On October 3, 2012, Hercules closed a public offering of 3.1
million shares of its common stock at a price of $10.85 per
share, resulting in proceeds of approximately $33.6
million, excluding other offering expenses.
In October 2012, in connection with the public offering
of $75.0 million in aggregate principal amount of 7.00%
Senior Unsecured Notes due 2019 (the September 2019 Notes), the
underwriters exercised their over-allotment option for an
additional $10.9 million in aggregate principal amount of the
September 2019 Notes, bringing the total size of the offering to
approximately $85.9 million.
About Hercules Technology Growth Capital, Inc.:
Hercules Technology Growth Capital, Inc. (NYSE: HTGC)
(“Hercules”) is the leading specialty finance company focused on
providing senior secured loans to venture capital-backed companies
in technology-related markets, including technology, biotechnology,
life science and cleantech industries at all stages of development.
Since inception (December 2003), Hercules has committed more than
$3.2 billion to over 220 companies and is the lender of choice for
entrepreneurs and venture capital firms seeking growth capital
financing.
Hercules’ common stock trades on the New York Stock Exchange
(NYSE) under the ticker symbol "HTGC."
In addition, Hercules has two outstanding bond issuances of
7.00% Senior Notes due 2019—the April 2019 Notes and September 2019
Notes—which trade on the NYSE under the symbols “HTGZ” and “HTGY,”
respectively.
Companies interested in learning more about financing
opportunities should contact info@htgc.com, or call
650.289.3060.
Forward-Looking Statements:
The statements contained in this release that are not purely
historical are forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject
to uncertainties and other factors that could cause actual results
to differ materially from those expressed in the forward-looking
statements including, without limitation, the risks, uncertainties,
including the uncertainties surrounding the current market
turbulence, and other factors we identify from time to time in our
filings with the Securities and Exchange Commission. Although we
believe that the assumptions on which these forward-looking
statements are based are reasonable, any of those assumptions could
prove to be inaccurate and, as a result, the forward-looking
statements based on those assumptions also could be incorrect. You
should not place undue reliance on these forward-looking
statements. The forward-looking statements contained in this
release are made as of the date hereof, and Hercules assumes no
obligation to update the forward-looking statements for subsequent
events.
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