Garrison Capital Inc. (Nasdaq: GARS) (“GARS”) and Portman Ridge
Finance Corporation (“PTMN”) (Nasdaq: PTMN) announced today that
they have entered into a definitive agreement under which GARS will
merge with and into PTMN, a business development company managed by
Sierra Crest Investment Management LLC (“Sierra Crest”), an
affiliate of BC Partners Advisors L.P. (“BC Partners”) and LibreMax
Capital LLC. The transaction is the result of the previously
announced review of strategic alternatives by GARS and has been
approved by a unanimous vote of the Board of Directors of GARS (on
the unanimous recommendation of the Special Committee of the Board
of Directors of GARS) and the Board of Directors of PTMN.
Transaction Highlights
- The combined company will be externally managed by Sierra Crest
and, based on the respective March 31, 2020 balance sheets, not
adjusted for transaction expenses, would have had total investments
of approximately $638.5 million, and a net asset value of
approximately $207.0 million;
- Stockholders should expect to realize immediate net investment
income per share accretion following the closing of the
transaction;
- The transaction is expected to deliver operational synergies
for the combined company as a result of the pro forma larger scale
and elimination of redundant GARS expenses;
- PTMN will assume GARS’ on-balance sheet CLO liabilities at the
closing of the transaction; and
- Following the transaction, current GARS stockholders are
expected to own approximately 41.6% of the combined company;
Under the terms of the proposed transaction,
GARS stockholders will receive a combination of (i)
$19.1 million in cash (approximately $1.19 per share) from
PTMN; (ii) PTMN shares valued at 100% of PTMN’s net asset value per
share at the time of closing of the transaction in an aggregate
number equal to GARS’ net asset value at closing minus the $19.1
million of PTMN cash merger consideration; and (iii) an additional
cash payment from Sierra Crest, the external adviser to PTMN, of
$5.0 million in the aggregate, or approximately $0.31 per share.
GARS’ stockholders will receive value per share of approximately
105% of GARS’ net asset value per share from PTMN and Sierra Crest
(based on March 31, 2020 net asset values per share of both GARS’
and PTMN’s stock and the aggregate value of cash consideration).
Assuming a transaction based on respective March 31, 2020 net asset
values for GARS ($105.7 million, or $6.59 per share) and PTMN
($120.4 million, or $2.69 per share), adjusted for expected
transaction expenses, and PTMN’s closing price on June 23, 2020 of
$1.25, the transaction (including the additional cash payment from
Sierra Crest of $0.31 per share) currently values GARS shares at
approximately $3.97 per share, which represents 62% of GARS’ March
31, 2020 net asset value (adjusted for expected transaction
expenses) and a 43% premium to GARS’ closing price on June 23,
2020.
The exchange ratio for the stock component of
the merger will be determined by the net asset value of GARS and
PTMN as of the closing, calculated as of 5:00 p.m. New York City
time on the day prior to the closing of the transaction. In
addition to approval by GARS’ and PTMN’s respective stockholders,
the closing of the merger is subject to customary conditions. The
parties currently expect the transaction to be completed in the
fourth calendar quarter of 2020.
“After a robust and thorough strategic
alternatives process conducted by the Board of Directors, we
believe this transaction is an excellent result for the GARS
stockholders, along with continuing the growth objective and value
creation for PTMN stockholders,” said Joseph Tansey, Chairman and
Chief Executive Officer of GARS. “In addition to a significant cash
consideration component, we believe the continued ownership of PTMN
stock and their affiliation with the BCP Credit team and the
overall BC Partners platform will provide stockholders with
enhanced value and significant future upside.”
“We are very excited to merge Garrison Capital
Inc. with Portman Ridge Finance Corporation, as it represents the
continued execution of our vision for consolidation in the BDC
space and is expected to be an accretive transaction for GARS and
PTMN stockholders. With the combined entity being almost
double the size of either current company, we believe stockholders
will benefit from larger scale and hold sizes on the investment
portfolio side, a reduction in per share public company costs and
increased trading liquidity in the equity,” said Ted Goldthorpe,
President and Chief Executive Officer of PTMN and Head of BC
Partners Credit.
Transaction AdvisorsKeefe, Bruyette &
Woods, A Stifel Company served as exclusive financial advisor to
the Special Committee of GARS’ Board of Directors. Proskauer Rose
LLP served as counsel to GARS and Eversheds Sutherland (US) LLP
served as counsel to the Special Committee of GARS’ Board of
Directors. Simpson Thacher & Bartlett LLP served as counsel to
PTMN.
Investor Presentation and Conference CallPTMN
and GARS will host a joint conference call on Thursday, June 25,
2020 at 2:00 pm Eastern Time to discuss the transaction. All
interested persons are invited to participate on the call and can
access the conference call by dialing (866) 757-5630. International
callers can access the conference by dialing (707) 287-9356.
Conference ID is 1077537.
About Garrison Capital
Inc.Garrison Capital Inc. is an externally managed,
non-diversified, closed-end management Investment Company that has
elected to be treated as a business development company under the
Investment Company Act of 1940. GARS is managed by its investment
adviser, Garrison Capital Advisers LLC, an affiliate of Garrison
Investment Group, and a registered investment adviser under the
Investment Advisers Act of 1940 which provides the resources and
expertise of the investment professionals at Garrison Investment
Group.
GARS’ filings with the Securities and Exchange
Commission (“SEC”), earnings releases, press releases and other
financial, operational and governance information are available on
GARS’ website at http://www.garrisoncapitalbdc.com.
About Portman Ridge Finance
CorporationPortman 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. PTMN’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. PTMN’s investment activities
are managed by its investment adviser, Sierra Crest Investment
Management LLC, an affiliate of BC Partners Advisors L.P. and
LibreMax Capital LLC.
PTMN's filings with the SEC, earnings releases,
press releases and other financial, operational and governance
information are available on PTMN's website at
www.portmanridge.com.
Forward-Looking Statements This
press release may contain forward-looking statements that involve
substantial risks and uncertainties, including statements regarding
the completion of the transaction between GARS and PTMN. We may use
words such as "anticipates," "believes," "intends," "plans,"
"expects," "projects," "estimates," "will," "should," "may" and
similar expressions to identify forward-looking statements. These
forward-looking statements are subject to various risks and
uncertainties. Certain factors could cause actual results and
conditions to differ materially from those projected, including the
uncertainties associated with (i) the timing or likelihood of the
transaction closing, (ii) the expected synergies and savings
associated with the transaction, (iii) the expected elimination of
certain expenses and costs due to the transaction, (iv) the
percentage of GARS stockholders voting in favor of the transaction,
(v) the percentage of PTMN stockholders voting in favor of the
share issuance pursuant to the terms of the transaction, (vi) the
possibility that competing offers or acquisition proposals for GARS
will be made; (vii) the possibility that competing offers or
acquisition proposals for GARS will be made; (vii) the possibility
that any or all of the various conditions to the consummation of
the merger may not be satisfied or waived; (viii) risks related to
diverting management’s attention from GARS’ ongoing business
operations, (ix) the risk that stockholder litigation in connection
with the transactions contemplated by the merger agreement may
result in significant costs of defense and liability, (x) the
future operating results of our portfolio companies or the combined
company, (xi) regulatory factors, (xii) 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 (xiii) other changes in the conditions of
the industries in which we invest and other factors enumerated in
our filings with the SEC. You should not place undue reliance on
such forward-looking statements, which speak only as of the date of
this press release. We undertake no obligation to update our
forward-looking statements made herein, unless required by law. You
should, therefore, not rely on these forward-looking statements as
representing our views as of any date subsequent to the date of
this press release. You should read this communication and the
documents that we reference in this communication completely and
with the understanding that our actual future results may be
materially different from what we expect. We qualify all of our
forward-looking statements by these cautionary statements.
Additional Information and Where to Find
ItIn connection with the proposed transaction, GARS and
PTMN plan to file with the SEC and mail to their respective
stockholders a joint proxy statement on Schedule 14A (the “Joint
Proxy Statement”), and PTMN plans to file with the SEC a
registration statement on Form N-14 (the “Registration Statement”).
The Joint Proxy Statement and the Registration Statement will each
contain important information about GARS, PTMN, the proposed
transaction and related matters. This communication does not
constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval. No offer
of securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the Securities Act of 1933.
STOCKHOLDERS OF GARS AND PTMN ARE URGED TO READ THE JOINT PROXY
STATEMENT AND REGISTRATION STATEMENT, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT GARS, PTMN, THE PROPOSED TRANSACTION AND RELATED
MATTERS. Investors and security holders will be able to obtain the
documents filed with the SEC free of charge at the SEC’s web site,
www.sec.gov or, for documents filed by GARS, from GARS’ website at
www.garrisoncapitalbdc.com and for document filed by PTMN, from
PTMN’s website at www.portmanridge.com.
Participants in the
SolicitationGARS, its directors, certain of its executive
officers and certain employees and officers of Garrison Capital
Advisers LLC and its affiliates may be deemed to be participants in
the solicitation of proxies in connection with the proposed
transaction. Information about the directors and executive officers
of GARS is set forth in its proxy statement for its 2020 Annual
Meeting of Stockholders, which was filed with the SEC on March 23,
2020. PTMN, its directors, certain of its executive officers and
certain employees and officers of Sierra Crest Investment
Management LLC and its affiliates may be deemed to be participants
in the solicitation of proxies in connection with the proposed
transaction. Information about the directors and executive officers
of PTMN is set forth in its proxy statement for its 2020 Annual
Meeting of Stockholders, which was filed with the SEC on April 29,
2020. Information regarding the persons who may, under the rules of
the SEC, be considered participants in the solicitation of the GARS
and PTMN stockholders in connection with the proposed transaction
will be contained in the Joint Proxy Statement when such document
becomes available. This document may be obtained free of charge
from the sources indicated above.
CONTACTS:
GARSGarrison Capital Inc.1290 Avenue of the
Americas, 9th FloorNew York, NY
10104www.garrisoncapitalbdc.com |
PTMNPortman Ridge Finance Corporation650 Madison
Avenue, 23rd floorNew York, NY 10022www.portmanridge.com |
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Daniel Hahn – Chief Financial Officer(212)
372-9508contact@garrisoninv.com |
Ted Gilpin – Chief Financial Officer(212) 891-5007
info@portmanridge.com |
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Sierra CrestProsek PartnersKatherine Segura+1
(646) 818-9266ksegura@prosek.com |
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