NEW YORK, Dec. 23, 2020 (GLOBE NEWSWIRE) — Harvest Capital Credit score Company (NASDAQ: HCAP) (“HCAP”) and Portman Ridge Finance Company (NASDAQ: PTMN) (the “Firm” or “PTMN”) introduced at the moment that they’ve entered right into a definitive settlement below which HCAP will merge with and into PTMN, a enterprise growth firm managed by Sierra Crest Funding Administration LLC (“Sierra Crest”), an affiliate of BC Companions Advisors L.P. (“BC Companions”).
The transaction has been permitted by a unanimous vote of Particular Committee of the Board of Administrators of HCAP, the Board of Administrators of HCAP (apart from administrators affiliated with HCAP’s exterior funding adviser who abstained from voting) and the Board of Administrators of PTMN. As well as, the Board of Administrators of HCAP will suggest that HCAP stockholders vote in favor of adoption and approval of the definitive merger settlement, topic to sure closing situations.
Transaction Highlights
- The mixed firm will probably be externally managed by Sierra Crest and is anticipated to have complete belongings of roughly $757 million, and a web asset worth of roughly $248 million (every based mostly on September 30, 2020 stability sheets, adjusted for estimated transaction bills and PTMN’s latest merger with Garrison Capital Inc.);
- Stockholders ought to count on to appreciate web funding revenue per share accretion following the closing of the transaction;
- The transaction is anticipated to ship operational synergies for the mixed firm on account of the professional forma bigger scale and elimination of redundant HCAP bills;
- Sure important stockholders of HCAP have entered into voting help agreements with PTMN and agreed to vote their HCAP shares in favor of the transaction, which shares symbolize in combination roughly 31.6% of HCAP’s shares excellent as of December 22, 2020; and
- Following the transaction, present HCAP stockholders are anticipated to personal roughly 16.6% of the mixed firm.
In reference to the transaction, HCAP stockholders will obtain combination consideration equal to HCAP’s web asset worth at closing. This consideration will probably be funded utilizing PTMN shares (valued at 100% of PTMN’s web asset worth per share on the time of closing of the transaction) and, to the extent the required variety of PTMN shares exceeds 19.9% of the issued and excellent shares of PTMN frequent inventory instantly previous to the transaction closing, money consideration within the quantity of such extra. As described beneath, HCAP stockholders could have a chance, topic to sure limitations, to elect to obtain both money or PTMN shares in consideration for his or her HCAP shares. Moreover, all HCAP stockholders will obtain an extra money fee from Sierra Crest of $2.15 million within the combination, or roughly $0.36 per share.
Assuming a transaction based mostly on respective September 30, 2020 web asset values for HCAP and PTMN, adjusted for anticipated transaction bills and PTMN’s latest merger with Garrison Capital Inc., the merger transaction (together with the Sierra Crest extra money fee) presently values HCAP shares at roughly $10.11 per share which represents 104% of HCAP’s September 30, 2020 web asset worth (web of transaction bills). Utilizing PTMN’s closing value of $1.80 on December 22, 2020, the merger transaction (together with the Sierra Crest extra money fee) presently values HCAP shares at roughly $7.71 per share, which represents 79% of HCAP’s September 30, 2020 web asset worth (web of estimated transaction bills) and a 30% premium to HCAP’s closing value on December 22, 2020.
If the mixture merger consideration is to be paid in money in addition to PTMN inventory due to the 19.9% inventory issuance limitation described above, HCAP frequent stockholders could have the flexibility to elect to obtain consideration within the type of money or inventory, with the change ratio for the full consideration to be paid by PTMN within the merger being decided by the online asset worth of HCAP and PTMN as of the closing, calculated as of 5:00 p.m. New York Metropolis time two days previous to the closing of the transaction. Whereas every HCAP stockholder will obtain the identical per share consideration, stockholders receiving PTMN shares will obtain a variety of PTMN shares equal to the HCAP web asset worth per share as of 5:00 p.m. New York Metropolis time two days previous to the closing of the transaction divided by the volume-weighted common value of PTMN inventory for the 10-trading day interval ending two days previous to the date of the closing. HCAP frequent stockholders could obtain consideration from PTMN that features each money and inventory, relying on their election and the elections of different stockholders. HCAP stockholders who don’t make a inventory or money election will probably be deemed to have elected to obtain inventory in reference to the merger.
Along with approval by HCAP stockholders, the closing of the merger is topic to customary situations. The events presently count on the transaction to be accomplished within the second calendar quarter of 2021.
Administration Commentary
Ted Goldthorpe, President and Chief Govt Officer of PTMN and Head of BC Companions Credit score, said, “We proceed to execute on our technique of focusing on consolidation alternatives that turn into earnings accretive for shareholders of each PTMN and the acquired firm. We now have been proactive in figuring out particular alternatives the place our Firm can profit from better scale and quick value synergies. In previous transactions we have now efficiently benefitted from attaining better scale, which permits PTMN to each enhance place sizes whereas concurrently decreasing the impression of public firm reporting and different bills. We imagine the mixed firm will profit from having decrease financing prices, a decrease blended charge construction, a discount in public firm prices per share and an elevated buying and selling liquidity within the fairness.”
Joseph Jolson, Chairman and CEO of HCAP, said, “We imagine the mix with PTMN represents a good consequence for HCAP buyers. As HCAP’s largest non-institutional shareholder, I’ve agreed to take inventory within the merger and to lockup my PTMN place for 90 days post-closing to facilitate better liquidity for HCAP shareholders who obtain shares within the merger. The transaction is anticipated to be accretive to web funding revenue of the mixed firm as a result of materials value financial savings, decrease funding administration charges, and decreased borrowing prices on HCAP’s contributed belongings. Lastly, HCAP shareholders who obtain PTMN shares within the merger can count on to obtain common money dividends from PTMN on a go-forward foundation.”
Transaction Advisors
Keefe, Bruyette & Woods acted as monetary advisor to HCAP’s Particular Committee. Dechert LLP served as counsel to HCAP and HCAP’s Particular Committee and Simpson Thacher & Bartlett LLP served as counsel to PTMN.
Convention Name Particulars
PTMN and HCAP will host a joint convention name on Thursday, December 24, 2020 at 8:30 am Jap Time to debate the transaction. All individuals are invited to take part on the decision and may entry the convention name by dialing (866) 757-5630. Worldwide callers can entry the convention by dialing (707) 287-9356. Convention ID is 2625868.
A reside audio webcast of the convention name will be accessed by way of the Web, on a listen-only foundation by clicking the next hyperlink: https://edge.media-server.com/mmc/p/swvbuhcy.
The businesses will probably be using an investor presentation as an accompaniment to the reside name, which will probably be obtainable on HCAP’s web site at www.harvestcapitalcredit.com and PTMN’s web site at www.portmanridge.com.
About Harvest Capital Credit score Company
Harvest Capital Credit score Company (NASDAQ: HCAP) offers custom-made financing options to privately held small and mid-sized firms within the U.S., typically focusing on firms with annual revenues of lower than $100 million and annual EBITDA of lower than $15 million. HCAP’s funding goal is to generate each present revenue and capital appreciation primarily by making direct investments within the type of senior debt, subordinated debt and, to a lesser extent, minority fairness investments. HCAP is externally managed and has elected to be handled as a enterprise growth firm below the Funding Firm Act of 1940. For extra details about HCAP, go to www.harvestcapitalcredit.com.
About Portman Ridge Finance Company
Portman Ridge Finance Company (NASDAQ: PTMN) is a publicly traded, externally managed funding firm that has elected to be regulated as a enterprise growth firm below the Funding Firm Act of 1940. PTMN’s center market funding enterprise originates, buildings, funds and manages a portfolio of time period loans, mezzanine investments and chosen fairness securities in center market firms. PTMN’s funding actions are managed by its funding adviser, Sierra Crest Funding Administration LLC, an affiliate of BC Companions Advisors L.P.
PTMN’s filings with the SEC, earnings releases, press releases and different monetary, operational and governance data can be found on PTMN’s web site at www.portmanridge.com.
Ahead-Wanting Statements
This press launch, in addition to statements made through the convention name, could include forward-looking statements that contain substantial dangers and uncertainties, together with statements concerning the completion of the transaction between HCAP and PTMN. We could use phrases reminiscent of “anticipates,” “believes,” “intends,” “plans,” “expects,” “tasks,” “estimates,” “will,” “ought to,” “could” and comparable expressions to establish forward-looking statements. These forward-looking statements are topic to numerous dangers and uncertainties. Sure elements might trigger precise outcomes and situations to vary materially from these projected, together with the uncertainties related to (i) the timing or chance of the transaction closing, (ii) the anticipated synergies and financial savings related to the transaction, (iii) the anticipated elimination of sure bills and prices because of the transaction, (iv) the share of HCAP stockholders voting in favor of the transaction, (v) the chance that competing presents or acquisition proposals for HCAP will probably be made, (vi) the chance that any or all the varied situations to the consummation of the merger might not be happy or waived, (vii) dangers associated to diverting the respective administration’s consideration from HCAP’s and PTMN’s ongoing enterprise operations, (viii) the chance that stockholder litigation in reference to the transactions contemplated by the merger settlement could lead to important prices of protection and legal responsibility, (ix) the longer term working outcomes of our portfolio firms or the mixed firm, (x) regulatory elements, (xi) adjustments in regional or nationwide financial situations, together with however not restricted to the impression of the COVID-19 pandemic, and their impression on the industries during which we make investments, and (xii) different adjustments within the situations of the industries during which we make investments and different elements enumerated in our filings with the SEC. You shouldn’t place undue reliance on such forward-looking statements, which converse solely as of the date of the related communication. Neither HCAP nor PTMN undertakes any obligation to replace forward-looking statements made herein or through the convention name, until required by regulation. You must, due to this fact, not depend on these forward-looking statements as representing our views as of any date subsequent to the date of the communication. You must learn this communication and the paperwork that we reference on this communication fully and with the understanding that our precise future outcomes could also be materially completely different from what we count on. We qualify all of our forward-looking statements by these cautionary statements.
Further Info and The place to Discover It
In reference to the proposed transaction, HCAP and PTMN plan to file related supplies with the SEC, together with a registration assertion on Kind N-14 (the “Registration Assertion”), which is able to embrace a proxy assertion on Schedule 14A for HCAP, which will probably be mailed to HCAP’s stockholders and a prospectus for PTMN. The Registration Assertion will include vital details about HCAP, PTMN, the proposed transaction and associated issues. This communication doesn’t represent a proposal to promote or the solicitation of a proposal to purchase any securities or a solicitation of any vote or approval. No supply of securities shall be made besides by the use of a prospectus assembly the necessities of Part 10 of the Securities Act of 1933. STOCKHOLDERS OF HCAP ARE URGED TO READ THE REGISTRATION STATEMENT, INCLUDING THE PROXY STATEMENT INCLUDED THEREIN, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AND BEFORE MAKING ANY INVESTMENT OR VOTING DECISION BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HCAP, PTMN, THE PROPOSED TRANSACTION AND RELATED MATTERS. Traders and safety holders will be capable of get hold of the paperwork filed with the SEC freed from cost on the SEC’s site, www.sec.gov or, for paperwork filed by HCAP, from HCAP’s web site at https://ift.tt/2aNPQ27 and for paperwork filed by PTMN, from PTMN’s web site at www.portmanridge.com.
Contributors within the Solicitation
HCAP, its administrators, sure of its government officers and sure staff and officers of HCAP Advisors, LLC and its associates could also be deemed to be individuals within the solicitation of proxies in reference to the proposed transaction. Details about the administrators and government officers of HCAP is about forth in its proxy assertion for its 2020 Annual Assembly of Stockholders, which was filed with the SEC on April 21, 2020. PTMN, its administrators, sure of its government officers and sure staff and officers of Sierra Crest Funding Administration LLC and its associates could also be deemed to be individuals within the solicitation of proxies in reference to the proposed transaction. Details about the administrators and government officers of PTMN is about forth in its proxy assertion for its 2020 Annual Assembly of Stockholders, which was filed with the SEC on April 29, 2020. Info concerning the individuals who could, below the principles of the SEC, be thought of individuals within the solicitation of the HCAP stockholders in reference to the proposed transaction will probably be contained within the Registration Assertion, together with the proxy assertion included therein, and different related supplies when such paperwork turn into obtainable. This doc could also be obtained freed from cost from the sources indicated above.
Contacts:
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