- Closed total new debt and equity
commitments of $190.7 million to twelve (12) companies including
eight (8) new and four (4) existing portfolio companies for Q1
2017
- Unscheduled principal repayments “early
pay-offs” of $100.3 million for Q1 2017
- Six (6) Hercules portfolio companies
currently in IPO Registration
Hercules Capital, Inc. (NYSE:HTGC) (“Hercules” or the
“Company”), the leading specialty finance company to innovative
venture growth, pre-IPO and M&A stage companies backed by
leading venture capital firms, today provided its interim portfolio
update for the first quarter 2017.
“Our first quarter 2017 portfolio activity reflects our slow and
steady, conservative underwriting posture as we continue to
navigate through the uncertainty of the new administration policies
to be deployed, closing over $190 million of new commitments,
adding eight new innovative venture growth stage technology and
life sciences companies, backed by some of the leading venture
capital firms in the U.S., to our portfolio,” stated Manuel A.
Henriquez, chairman and chief executive officer of Hercules. “We
continue to be guardedly optimistic and well positioned in the
first half of 2017, maintaining a highly asset sensitive balance
sheet that will benefit from future rate increases, having a
strong-liquidity position to onboard investments that meet our
stringent underwriting practices and maintaining a low-leveraged
balance sheet, as we monitor the macro economic environment of the
new administration’s proposed fiscal policies.”
New Debt and Equity Commitments for Q1 2017:
As of March 31, 2017, Hercules has originated $190.7
million of new debt and equity commitments to twelve (12) new and
existing portfolio companies.
Twelve (12) new commitments to innovative venture growth
stage companies:
Technology Portfolio – $73.7
Million
- $40.0 million to a leading technology
developer that provides advanced text analytics, enterprise survey
and customer engagement to help hundreds of the world’s leading
brands understand and improve their customer experience
- $15.0 million to a developer and
pioneer of analytical devices for chemical and biomolecule
analysis
- $15.0 million to a leading provider of
on-demand project management software for small and midsize
companies
- $3.7 million equity investment to a
technology developer that provides the most complete enterprise
social technology in the world, designed to help large companies
collaborate across their entire organization to create intuitive,
superior customer experiences across every social channel
Life Sciences Portfolio – $100.0
Million
- $55.0 million to a leading
clinical-stage biopharmaceutical company focused on acquiring,
developing and commercializing novel therapeutics for the treatment
of dementia
- $20.0 million to a biopharmaceutical
company committed to the development and commercialization of
innovative new treatments for people with serious, rare muscle
diseases through the application of adeno-associated virus (AAV)
gene therapy technology
- $15.0 million to a medical devices
company focused on bringing innovative, cost-effective, surgical
reconstruction solutions to surgeons, hospitals and patients
- $10.0 million to a biopharmaceutical
company focused on discovering and developing drugs to improve
outcomes for patients with cancer
New Commitments to Four (4) Existing
Portfolio Companies – $17.0 Million
Unscheduled Early Principal Repayments “Early
Pay-Offs:”
As of March 31, 2017, Hercules received $100.3 million in
unscheduled early principal repayments “early pay-offs.”
Portfolio Company IPO, M&A and Other Activity in Q1
2017:
IPO Activities
As of March 31, 2017, Hercules held warrant and equity positions
in six (6) portfolio companies that had filed Registration
Statements in contemplation of a potential IPO, including:
- Six (6) companies filed confidentially
under the JOBS Act
There can be no assurances that companies that have yet to
complete their IPOs will do so.
M&A Activities
1. In January 2017, Hercules’ portfolio company Merrimack
Pharmaceuticals, Inc. (NASDAQ: MACK) announced that it had
entered into a definitive asset and sale agreement with Ipsen
(Euronext: IPN; ADR:IPSEY), a global specialty-driven
pharmaceutical group committed to discovering new solutions for
targeted debilitating diseases. Merrimack intends to use part of
the proceeds to extinguish the $175.0 million in outstanding Senior
Secured Notes due in 2022. Hercules anticipates the transaction to
be completed by the end of Q1 2017, with the potential repayment of
its outstanding debt obligation to follow.
2. In February 2017, Hercules’ portfolio company Jaguar
Animal Health, Inc. (NASDAQ: JAGX) entered a binding merger
agreement with Napo Pharmaceuticals, a company that focuses on the
development and commercialization of proprietary pharmaceuticals
for the global marketplace in collaboration with local partners.
Subject to the conditions to closing, the proposed merger is
expected to close during the second quarter of 2017.
3. In February 2017, Hercules’ portfolio company Nasty
Gal, a Los Angeles, CA-based fashion retail website for girls
that sells vintage clothing, shoes and accessories, was acquired by
Boohoo.com, a Manchester, England-based online fashion retailer,
for $20.0 million in consideration for Nasty Gal’s intellectual
property assets and customer databases. Hercules initially
committed $20.0 million in venture debt financing, and has an
outstanding balance at cost on its senior secured term loan with
Nasty Gal of $13.1 million as of December 31, 2016. On February 28,
2017, Hercules received a partial payment of $12.6 million from the
sale of Nasty Gal assets, with full repayment expected upon close
of escrow.
4. In February 2017, Hercules’ portfolio company Persimmon
Technologies Corporation, a manufacturer and distributor of
vacuum robotics, entered into a definitive agreement with Sumitomo
Heavy Industries, Ltd. to be acquired in an all-cash transaction.
In March 2017, the acquisition was completed. Persimmon will become
a subsidiary of Sumitomo Heavy Industries. Hercules initially
committed $7.0 million in venture debt financing in December 2015
and held warrants for 63,348 shares of Preferred Series D stock as
of December 31, 2016.
5. In February 2017, Hercules portfolio company JumpStart
is actively engaged in confidential M&A activity, which if
completed could result in significant recovery of previously
impaired loan. Financial terms were not disclosed. However, M&A
negotiations are subject to many factors and hard to predict as to
if or when they will be completed, if at all.
6. In March 2017, Hercules’ portfolio company Cerulean Pharma
Inc. (NASDAQ: CERU) announced it has entered into a definitive
stock purchase agreement with Daré Bioscience, a privately-held,
clinical-stage pharmaceutical company advancing products for
women’s reproductive health, under which the equity holders of Daré
Bioscience will become the majority owners of Cerulean, subject to
the approval by stockholders of Cerulean. Cerulean also announced
the sale of certain assets to BlueLink Pharmaceuticals and
Novartis. Cerulean also announced that, in connection with these
transactions, it is paying off its debt facility with Hercules.
Hercules initially committed $26.0 million in venture debt
financing, and had an outstanding balance at cost on it senior
secured term loan with Cerulean of $14.0 million as of December 31,
2016.
7. In March 2017, Hercules’ portfolio company SOASTA,
Inc., announced that it had entered into an agreement with
Akamai Technologies, Inc. (NASDAQ: AKAM), a leading content
delivery services provider for media and software delivery and
cloud security solutions, to be acquired in an all-cash
transaction. Akamai Technologies announced on April 7, 2017, that
it had completed the acquisition. Hercules initially committed
$18.5 million in venture debt financing in August 2014, and
currently holds warrants for 410,800 shares of common stock as of
December 31, 2016.
8. In November 2016, Hercules’ portfolio company FanDuel
Inc. announced a merger agreement with sports technology
company DraftKings, Inc. The transaction is expected to close in
2017. Financial terms were not disclosed. The transaction is
subject to customary closing conditions and regulatory
approvals.
9. In August 2016, Hercules’ portfolio company
IronPlanet, a leading online marketplace for used heavy
equipment and other durable assets, announced that it had entered
into a definitive agreement with Ritchie Bros. Auctioneers
Incorporated (NYSE & TSX: RBA), the world’s largest industrial
auctioneer and a leading equipment distributor, to be acquired for
approximately US $758.5 million, subject to customary closing
adjustments. Hercules initially committed $37.5 million in venture
debt financing to IronPlanet in October 2014. Hercules currently
holds warrants for 1.2 million shares of Preferred Series D stock,
as of December 31, 2016.
Other Activities
1. In March 2017, Hercules’ portfolio company Sungevity,
Inc. announced that it had commenced voluntary Chapter 11
proceedings in the U.S. Bankruptcy Court for the District of
Delaware, in order to facilitate a financial and corporate
restructuring to strengthen their balance sheet and recapitalize
the company. During the Chapter 11 proceedings, the company expects
operations to continue uninterrupted. In connection with the
restructuring process, and under Section 363 of the Bankruptcy
Code, Sungevity entered into an asset purchase agreement with a
group of investors, led by Northern Pacific Group. On April 7,
2017, the U.S. Bankruptcy Court approved Sungevity’s DIP financing
facility on a final basis.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE: HTGC) (“Hercules”) is the leading
and largest specialty finance company focused on providing senior
secured venture growth loans to high-growth, innovative venture
capital-backed companies in a broad variety of technology, life
sciences and sustainable and renewable technology industries. Since
inception (December 2003), Hercules has committed more than $6.7
billion to over 375 companies and is the lender of choice for
entrepreneurs and venture capital firms seeking growth capital
financing. Companies interested in learning more about financing
opportunities should contact info@htgc.com, or call
650.289.3060.
Hercules’ common stock trades on the New York Stock Exchange
under the ticker symbol "HTGC."
In addition, Hercules has one outstanding bond issuance of 6.25%
Unsecured Notes due July 2024 (NYSE: HTGX).
Forward-Looking Statements
This press release may contain “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995. You should understand that under Section 27A(b)(2)(B) of
the Securities Act of 1933, as amended, and Section 21E(b)(2)(B) of
the Securities Exchange Act of 1934, as amended, or the Exchange
Act, the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995 do not apply to forward-looking
statements made in periodic reports we file under the Exchange
Act.
The information disclosed in this press release is made as of
the date hereof and reflects Hercules most current assessment of
its historical financial performance. Actual financial results
filed with the SEC may differ from those contained herein due to
timing delays between the date of this release and confirmation of
final audit results. 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 volatility, and
other factors the Company identifies from time to time in its
filings with the SEC. Although Hercules believes 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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version on businesswire.com: http://www.businesswire.com/news/home/20170417005332/en/
Hercules Capital, Inc.Michael Hara, 650-433-5578 HT-HNInvestor
Relations and Corporate Communicationsmhara@htgc.com
Hercules Capital (NYSE:HTGC)
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