Mount Logan Capital Inc. Provides Update on Strategic Minority Investment in Sierra Crest
December 29 2020 - 2:28PM
Mount Logan Capital Inc. (NEO: MLC) (“
Mount Logan”
or the “
Company”) is pleased to announce that
Portman Ridge Finance Corporation (“
Portman
Ridge”), which is managed by Sierra Crest Investment
Management LLC (“
Sierra Crest”) of which Mount
Logan recently acquired a 21.4% stake, announced on December 23,
2020, that it had entered into a definitive agreement with Harvest
Capital Credit Corporation (NASDAQ: HCAP) (“
HCAP”)
whereby HCAP will merge with and into Portman Ridge (the
“
HCAP Transaction”).
HCAP is a publicly-traded, U.S.-based,
closed-end, externally managed business development company
(“BDC”) within the meaning of the U.S. Investment
Company Act of 1940, as amended (the “1940 Act”)
that provides customized financing to small and midsized businesses
located throughout North America. The combined company will be
externally managed by Sierra Crest and is expected to have total
assets of approximately $757 million (based on September 30, 2020
balance sheets, adjusted for estimated transaction expenses and
Portman Ridge’s recent merger with Garrison Capital Inc.).
Ted Goldthorpe, CEO and Chairman of Mount Logan,
noted, “The HCAP Transaction represents the third M&A
transaction completed by Portman Ridge since coming under the
management of Sierra Crest in April 2019. We expect the combined
company’s growth and increased scale will benefit its shareholders
and support the future earnings growth of Sierra Crest and
ultimately Mount Logan by providing a larger base of fee-generating
permanent capital.”
Closing of the HCAP Transaction is subject to
several conditions, including the approval by HCAP stockholders,
and is expected to be completed in the second calendar quarter of
2021. Certain significant stockholders of HCAP have entered into
voting support agreements with Portman Ridge and agreed to vote
their HCAP shares in favor of the HCAP Transaction, which shares
represent in aggregate approximately 31.6% of HCAP’s shares
outstanding as of December 22, 2020.
About Mount Logan Capital Inc.
Mount Logan Capital Inc. is an alternative asset
management company that is focused on public and private debt
securities in the North American market. The Company seeks to
source and actively manage loans and other debt-like securities
with credit-oriented characteristics. The Company actively sources,
evaluates, underwrites, monitors and primarily invests in loans,
debt securities, and other credit-oriented instruments that present
attractive risk-adjusted returns and present low risk of principal
impairment through the credit cycle.Cautionary Notes
This press release contains forward-looking
statements and information within the meaning of applicable
securities legislation (collectively referred to herein as
“forward-looking statements”). Forward-looking
statements can be identified by the expressions "seeks", "expects",
"believes", "estimates", "will", "target" and similar expressions.
The forward-looking statements are not historical facts, but
reflect the current expectations of management of the Company
regarding future results or events and are based on information
currently available to them. Certain material factors and
assumptions were applied in providing these forward-looking
statements. The forward-looking statements discussed in this press
release may include, but are not limited to, statements relating to
the Company’s transition to an asset-light business model; the
likelihood of the closing of the HCAP Transaction and the timing
thereof; the ability of each of Sierra Crest and the combined
company to further grow and scale their respective business; any
change in earnings potential for the Company as a result of any
growth of each of Sierra Crest and the combined company; and
statements relating to the business and future activities of the
Company. All forward-looking statements in this press release are
qualified by these cautionary statements. The Company believes that
the expectations reflected in forward-looking statements are
reasonable based on upon the information available at the time such
information was given; however, the Company can give no assurance
that the actual results or developments will be realized by certain
specified dates or at all. These forward-looking statements are
subject to a number of risks and uncertainties that could cause
actual results or events to differ materially from current
expectations, including the risk that the HCAP Transaction may not
be completed or if completed may not be completed on the terms
described herein, that the Company has only a minority interest in
Sierra Crest and does not have the ability to affect the control
over Sierra Crest or direct the management or policies of Sierra
Crest, the risk that Sierra Crest may cease to be the investment
adviser to its existing portfolio companies including Portman Ridge
and may not enter into further asset management agreements in order
to scale and grow its business, the risk that Portman Ridge does
not scale and grow its business in a way that provides a
significant benefit to the Company, the Company has a limited
operating history with respect to an asset-light business model as
well as the matters discussed under "Risk Factors" in the most
recently filed annual information form and management’s discussion
and analysis for the Company. Readers, therefore, should not place
undue reliance on any such forward-looking statements. Further, a
forward-looking statement speaks only as of the date on which such
statement is made. The Company undertakes no obligation to publicly
update any such statement or to reflect new information or the
occurrence of future events or circumstances except as required by
securities laws. The forward-looking statements in this press
release are made as of the date of this press release.
This press release is not, and under no
circumstances is it to be construed as, a prospectus or an
advertisement, and the communication of this press release is not,
and under no circumstances is it to be construed as, an offer to
sell or a solicitation of an offer to purchase securities of the
Company. This press release is not intended for U.S. persons. The
Company’s shares are not and will not be registered under the U.S.
Securities Act of 1933, as amended, and the Company is not and will
not be registered under the 1940 Act. U.S. persons are not
permitted to purchase the Company’s shares absent an applicable
exemption from registration under each of these Acts. In addition,
the number of investors in the United States, or which are U.S.
persons or purchasing for the account or benefit of U.S. persons,
will be limited to such number as is required to comply with an
available exemption from the registration requirements of the 1940
Act.
For additional information, please contact:
Ted Gilpin, Chief Financial
Officerted.gilpin@mountlogancapital.ca
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