Rajib Chanda, Esq.
Jonathan L. Corsico, Esq.
Steven Grigoriou, Esq.
Simpson Thacher & Bartlett LLP
900 G Street, N.W.
Washington, DC 20001
Telephone: (202) 636-5500
Fax: (202) 636-5502
|
| |
Thomas J. Friedmann, Esq.
Harry S. Pangas, Esq.
Bernardo L. Piereck, Esq.
Dechert LLP
1900 K Street, NW
Washington, DC 20006
Telephone: (202) 261-3300
Fax: (202) 261-3333
|
Title of Securities Being Registered
|
| |
Amount Being
Registered(1)
|
| |
Proposed Maximum
Offering Price
per Share of
Common Stock
|
| |
Proposed Maximum
Aggregate
Offering Price(2)
|
| |
Amount of
Registration Fee(3)
|
Common Stock, par value $0.01 per share
|
| |
15,057,682 shares
|
| |
N/A
|
| |
$45,905,125
|
| |
$5,008.25
|
(1)
|
The number of shares to be registered represents the maximum number of shares of the registrant’s common stock estimated to be
issuable in connection with the merger agreement described in the enclosed document. Pursuant to Rule 416, this registration statement also covers additional securities that may be issued as a result of stock splits, stock dividends or
similar transactions.
|
(2)
|
Estimated solely for the purpose of calculating the registration fee and calculated pursuant to Rule 457(c) and Rule 457(f)(1) under
the Securities Act of 1933, as amended.
|
(3)
|
Based on a rate of $109.10 per $1,000,000 of the proposed maximum aggregate offering price.
|
(i)
|
adopt the Agreement and Plan of Merger, dated as of December 23, 2020 (as may be amended from time to time, the “Merger
Agreement”), by and among Portman Ridge Finance Corporation, a Delaware corporation (“PTMN”), Rye Acquisition Sub Inc., a Delaware corporation and a direct wholly-owned subsidiary of PTMN (“Acquisition Sub”), HCAP, and Sierra Crest
Investment Management LLC, a Delaware limited liability company and the external investment adviser to PTMN (“Sierra Crest”), and approve the transactions contemplated thereby, including the Mergers (as defined below) (such proposal
collectively, the “Merger Proposal”); and
|
(ii)
|
approve the adjournment of the HCAP Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event
that there are insufficient votes at the time of the HCAP Special Meeting to approve the Merger Proposal (such proposal, the “HCAP Adjournment Proposal” and together with the Merger Proposal, the “HCAP Proposals”).
|
|
| |
PTMN
Common Stock
|
Closing Sales Price at December 22, 2020
|
| |
$1.80
|
Closing Sales Price at [•], 2021
|
| |
$[•]
|
|
| |
Sincerely yours,
|
|
| |
|
|
| |
William E. Alvarez, Jr.
|
|
| |
Chief Financial Officer, Chief Compliance Officer &
Secretary of
Harvest Capital Credit Corporation
|
Harvest Capital Credit Corporation
|
| |
Portman Ridge Finance Corporation
|
767 Third Avenue, 29th Floor
|
| |
650 Madison Avenue, 23rd Floor
|
New York, New York 10017
|
| |
New York, NY 10022
|
(212) 906-3589
|
| |
(212) 891-2880
|
(i)
|
adopt the Agreement and Plan of Merger, dated as of December 23, 2020 (as may be amended from time to time, the “Merger
Agreement”), by and among Portman Ridge Finance Corporation, a Delaware corporation (“PTMN”), Rye Acquisition Sub Inc., a Delaware corporation and a direct wholly-owned subsidiary of PTMN (“Acquisition Sub”), HCAP, and Sierra Crest
Investment Management LLC, a Delaware limited liability company and the external investment adviser to PTMN (“Sierra Crest”), and approve the transactions contemplated thereby, including the Mergers (as defined below) (such proposal
collectively, the “Merger Proposal”); and
|
(ii)
|
approve the adjournment of the HCAP Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that
there are insufficient votes at the time of the HCAP Special Meeting to approve the Merger Proposal (such proposal, the “HCAP Adjournment Proposal” and together with the Merger Proposal, the “HCAP Proposals”).
|
|
| |
By Order of the Board of Directors,
|
|
| |
|
|
| |
|
|
| |
William E. Alvarez, Jr.
|
|
| |
Chief Financial Officer, Chief Compliance Officer &
Secretary of Harvest Capital Credit Corporation
|
Q:
|
Why am I receiving these materials?
|
A:
|
HCAP is furnishing these materials to HCAP Stockholders in connection with
the solicitation of proxies by the board of directors of HCAP (the “HCAP Board”) for use at the HCAP Special Meeting to be held virtually at [•] a.m., Eastern Time, on [•], 2021 at the following [•], and any adjournments or postponements thereof.
|
Q:
|
What items will be considered and voted on at the HCAP Special Meeting?
|
A:
|
At the HCAP Special Meeting, HCAP Stockholders will be asked to approve:
(i) the Merger Agreement and the transactions contemplated thereby, including the Mergers (such proposal collectively, the “Merger Proposal”); and
(ii) the adjournment of the HCAP Special Meeting, if necessary or appropriate, to solicit additional proxies, in the event that there are insufficient votes at the time of the HCAP Special
Meeting to approve the Merger Proposal (such proposal, the “HCAP Adjournment Proposal” and together with the Merger Proposal, the “HCAP Proposals”).
No other matters will be acted upon at the HCAP Special Meeting without further notice.
|
Q:
|
How does the HCAP Board recommend voting on the HCAP Proposals at the HCAP Special Meeting?
|
A:
|
The HCAP Board, acting on the unanimous recommendation of the special
committee of the HCAP Board (the “HCAP Special Committee”) comprised solely of the directors of the HCAP Board who are not “interested persons,” as
defined in the Investment Company Act of 1940, as amended (the “1940 Act”), of HCAP (the “HCAP Independent Directors”), approved the Merger Agreement and the transactions contemplated thereby, including the Mergers, and recommends that HCAP Stockholders vote “FOR” the Merger Proposal and, if necessary or appropriate, “FOR” the HCAP
Adjournment Proposal.
|
Q:
|
If I am an HCAP Stockholder, what is the “Record Date” and what does it mean?
|
A:
|
The record date for the HCAP Special Meeting is [•], 2021 (the “HCAP Record Date”). The HCAP Record Date was established by the HCAP Board, and only holders of record of
shares of HCAP Common Stock at the close of business on the HCAP Record Date are entitled to receive notice of, and vote at, the HCAP Special Meeting
or any adjournments and postponements of HCAP Special Meeting. As of the HCAP Record Date, there were [•]
shares of HCAP Common Stock outstanding.
|
Q:
|
If I am an HCAP Stockholder, how many votes do I have?
|
A:
|
Each share of HCAP Common Stock held by a holder of record as of the HCAP
Record Date has one vote on each matter to be considered at the HCAP Special Meeting.
|
Q:
|
If I am an HCAP Stockholder, how do I vote?
|
A:
|
The HCAP Special Meeting will be hosted live via Internet audio webcast. Any
HCAP Stockholder can attend the HCAP Special Meeting live online at [•]. If you were an HCAP Stockholder as
of the HCAP Record Date, or you hold a valid proxy for the HCAP Special Meeting, you can vote at the HCAP Special Meeting or any adjournments and
postponements of HCAP Special Meeting. A summary of the information you need to attend the HCAP Special Meeting online is provided below:
|
•
|
Instructions on how to attend and participate via the Internet, including how to demonstrate proof of share ownership, are posted
at [•];
|
•
|
Assistance with questions regarding how to attend and participate via the Internet will be provided at [•] on the day of the HCAP
Special Meeting;
|
•
|
The webcast will start at [•] a.m., Eastern Time, on [•], 2021;
|
•
|
HCAP Stockholders may vote and submit questions while attending the HCAP Special Meeting via the Internet; and
|
•
|
HCAP Stockholders will need a control number to enter the HCAP Special Meeting.
|
•
|
By Internet: www.proxyvote.com
|
•
|
By telephone: [•] to reach a toll-free, automated touchtone voting line, [•] Monday
through Friday 9:00 a.m. until 10:00 p.m. Eastern Time to reach a toll-free, live operator line.
|
•
|
By mail: You may vote by proxy by following the directions and indicating your
instructions on the enclosed proxy card, dating and signing the proxy card, and promptly returning the proxy card in the envelope provided, which requires no postage if mailed in the United States. Please allow sufficient time for your
proxy card to be received on or prior to 11:59 p.m., Eastern Time, on [•], 2021.
|
Q:
|
What if an HCAP Stockholder does not specify a choice for a matter when authorizing a proxy?
|
A:
|
All properly executed proxies representing shares of HCAP Common Stock at
the HCAP Special Meeting will be voted in accordance with the directions given. If the enclosed proxy card is signed, dated and returned without any
directions given, the shares of HCAP Common Stock will be voted “FOR” each of the HCAP Proposals.
|
Q:
|
If I am an HCAP Stockholder, how can I change my vote or revoke a proxy after submission?
|
A:
|
If you are a stockholder of record, you can change your vote or revoke your
proxy by:
|
•
|
delivering a written revocation notice before 11:59 p.m. Eastern Time on [•], 2021 to HCAP’s corporate secretary, William E.
Alvarez, Jr., at Harvest Capital Credit Corporation, 767 Third Avenue, 29th Floor, New York, NY 10017, Attention: Corporate Secretary;
|
•
|
voting again using the telephone or Internet before 11:59 p.m. Eastern Time on [•], 2021 (your latest telephone or Internet proxy
is the one that will be counted); or
|
•
|
attending and voting during the HCAP Special Meeting. Simply logging into the HCAP Special Meeting will not, by itself, revoke
your proxy.
|
Q:
|
If my shares of HCAP Common Stock are held in a broker-controlled account or in “street name,” will my broker
vote my shares for me?
|
A:
|
No. You should follow the instructions provided by your broker on your
voting instruction form. It is important to note that your broker will vote your shares only if you provide instructions on how you would like your
shares to be voted at the HCAP Special Meeting.
|
Q:
|
What constitutes a “quorum” for the HCAP Special Meeting?
|
A:
|
The presence at the HCAP Special Meeting, virtually or represented by proxy,
of the holders of a majority of the voting power of the issued and outstanding shares of HCAP Common Stock entitled to vote thereat will constitute a
quorum. Abstentions will be treated as shares present for quorum purposes. Shares held by a broker, bank, trustee or nominee for which the broker, bank, trustee or nominee has not received
voting instructions from the record holder as to how to vote such shares and does not have discretionary authority to vote the shares on non-routine
proposals (which are considered “broker non-votes” with respect to such proposals) will be treated as shares present for quorum purposes to the extent there are any such broker non-votes cast at the HCAP Special Meeting.
|
Q:
|
What vote is required to approve each of the proposals being considered at the HCAP Special Meeting?
|
A:
|
The affirmative vote of the holders of a majority of the outstanding shares
of HCAP Common Stock entitled to vote at the HCAP Special Meeting is required to approve the Merger Proposal. Abstentions and broker non-votes will
have the same effect as votes “against” the Merger Proposal.
|
Q:
|
Do holders of shares of PTMN Common Stock (“PTMN Stockholders”) have a right to vote?
|
A:
|
No, the transaction is not required to be approved by PTMN Stockholders.
|
Q:
|
What will happen if the Merger Proposal being considered at the HCAP Special Meeting is not approved by the
required vote?
|
A:
|
If the Mergers do not close because HCAP Stockholders do not approve the
Merger Proposal or any of the other conditions to the closing of the Mergers is not satisfied or, if legally permissible, waived, PTMN and HCAP will
continue to operate independently under the management of their respective investment advisers, and PTMN’s and HCAP’s respective directors and officers will continue to serve in such roles
until their respective successors are duly elected and qualify, or their earlier death, resignation or removal. In addition, neither PTMN nor HCAP
will benefit from the expenses incurred in their pursuit of the Mergers and, under certain circumstances, HCAP will be required to pay half of PTMN’s expenses incurred in connection with the Mergers, subject to a maximum reimbursement payment of $500,000.
|
Q:
|
How will the final voting results be announced?
|
A:
|
Preliminary voting results may be announced at the HCAP Special Meeting.
Final voting results will be published by HCAP in a current report on Form 8-K within four business days after the date of the HCAP Special Meeting.
|
Q:
|
Are the proxy materials available electronically?
|
A:
|
HCAP has made the registration statement (of which this proxy
statement/prospectus forms a part), the Notice of Special Meeting of Stockholders and the proxy card available to HCAP Stockholders on the Internet.
Stockholders may (i) access and review the proxy materials of HCAP, (ii) authorize their proxies, as described in “The HCAP Special
Meeting—Voting of Proxies” and/or (iii) elect to receive future proxy materials by electronic delivery via the Internet address provided below.
|
Q:
|
Will my vote make a difference?
|
A:
|
Yes. Your vote is needed to ensure that the proposals can be acted upon.
Your vote is very important. Your immediate response will help avoid potential delays and may save significant additional expenses associated with
soliciting stockholder votes.
|
Q:
|
Whom can I contact with any additional questions about the HCAP Special Meeting?
|
A:
|
HCAP Stockholders can contact HCAP by calling HCAP collect at (212)
906-3589, by sending an email to HCAP at [•], or by writing to HCAP at 767 Third Avenue, 29th Floor, New
York, NY 10017, Attention: Corporate Secretary, or by visiting HCAP’s website at www.harvestcapitalcredit.com.
|
Q:
|
Where can I find more information about PTMN and HCAP?
|
A:
|
You can find more information about PTMN and HCAP in the documents described
under the section entitled “Where You Can Find More Information.”
|
Q:
|
What do I need to do now?
|
A:
|
PTMN and HCAP urge you to carefully read this entire document, including its
annexes. You should also review the documents referenced under “Where You Can Find More Information” and consult with your accounting, legal and tax advisors.
|
Q:
|
What will happen in the Mergers?
|
A:
|
At the Effective Time (as defined below), Acquisition Sub will be merged
with and into HCAP in the First Merger. As of the Effective Time, the separate corporate existence of Acquisition Sub will cease. HCAP will be the
Surviving Corporation of the First Merger and will continue its existence as a corporation under the laws of the State of Delaware until the Second Merger. Immediately after the Effective Time,
HCAP, as the Surviving Corporation in the First Merger, will merge with and into PTMN, with PTMN as the surviving entity in the Second Merger.
|
Q:
|
What will HCAP Stockholders receive in the Mergers?
|
A:
|
Subject to the terms and conditions of the Merger Agreement, at the closing
of the First Merger (the “Closing”), each HCAP Stockholder shall be entitled to receive Per Share Merger Consideration (as defined below) in cash or
shares of PTMN Common Stock, depending on the election of such HCAP Stockholder and the elections of other HCAP Stockholders, plus any cash in lieu of fractional shares. Furthermore, as additional consideration to the holders of shares of HCAP Common Stock that are issued and outstanding immediately prior to the Effective Time
(excluding shares held by subsidiaries of HCAP or
|
Q:
|
How do HCAP Stockholders select the type of Merger Consideration that such stockholder prefers to receive?
|
A:
|
A form of election (each, a “Form of Election”) has been provided to record
holders of HCAP Common Stock as of the record date for the HCAP Special Meeting. HCAP Stockholders who wish to elect to receive cash for any or all
shares of HCAP Common Stock held by such holder may indicate so on the Form of Election. In addition, HCAP will use its best efforts to make the Form of Election and this proxy statement/prospectus available to all persons who become HCAP Stockholders during the period between such record date and the HCAP Special Meeting. Any such
holder’s election to receive cash will be properly made only if the exchange agent (the “Exchange Agent”) has received at its designated office, by 5:00 p.m.,
New York City time, no later than the business day that is five business days preceding the closing date of the Mergers (the closing date of the Mergers is herein referred to as the “Closing
Date”) (the date upon which the Exchange Agent receives any such election from a holder is herein referred to as an “Election Date”) (such deadline,
the “Election Deadline”), a Form of Election properly completed and signed and accompanied by (if such shares are not book-entry shares) the stock certificate or certificates (“Certificates”) to which such Form of Election relates, duly endorsed in blank or otherwise in form acceptable for transfer on the books of HCAP (or by an
appropriate guarantee of delivery of such Certificate or Certificates as set forth in such Form of Election from a firm which is a member of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc. or a commercial bank of trust company having an office or correspondent in the United
States, provided such Certificates are in fact delivered to the Exchange Agent within three trading days after the date of execution of such guarantee of delivery).
|
Q:
|
Can HCAP Stockholders change their election after the Form of Election has been submitted?
|
A:
|
Yes. Any Form of Election may be revoked by the HCAP Stockholder submitting
such Form of Election to the Exchange Agent only by written notice received by the Exchange Agent (i) prior to 5:00 p.m., New York City time, on the
Election Date or (ii) after the date of the HCAP Special Meeting, if the Exchange Agent is legally required to permit such revocations and the Effective Time has not occurred prior to such revocation. In addition, all Forms of Election will automatically be revoked if the Exchange Agent
|
Q:
|
How will the Closing Net Asset Values of PTMN and HCAP be determined?
|
A:
|
Under the Merger Agreement, on the date which is two days prior to the
Closing Date (the “Determination Date”), each of PTMN and HCAP will deliver to the other a calculation of its estimated net asset value (“NAV”) as of
5:00 p.m. New York City time as of the Determination Date (such calculation with respect to HCAP, the “Closing HCAP Net Asset Value,” and such calculation with respect to PTMN, the “Closing PTMN Net Asset Value”), in each case, as approved by the HCAP Board or PTMN Board, as applicable, calculated in good faith and using the same assumptions and
methodologies, and applying the same types of adjustments, used in preparing the NAV of HCAP as of September 30, 2020 or the NAV of PTMN as of September 30,
2020, as applicable. HCAP and PTMN will update and redeliver the Closing HCAP Net Asset Value or the Closing PTMN Net Asset Value, respectively, and as reapproved by the HCAP Board or PTMN Board, as applicable, in the event of a material change to such calculation between the Determination Date and the Closing Date or if needed to ensure that the
calculation is determined within two days (excluding Sundays and holidays) prior to the Effective Time. Based on such calculations, the parties will calculate the “PTMN Per Share NAV,” which will be equal to (i) the Closing PTMN Net Asset Value divided by (ii) the number of shares of PTMN Common
Stock issued and outstanding as of the Determination Date.
|
Q:
|
Who is responsible for paying the expenses relating to completing the Mergers?
|
A:
|
In general, all fees and expenses incurred in connection with the Mergers
will be paid by the party incurring such fees and expenses, whether or not the Mergers or any of the transactions contemplated in the Merger Agreement
are consummated. However, HCAP will be required to pay half of PTMN’s expenses incurred in connection with the Mergers, subject to a maximum reimbursement payment of $500,000, if the Merger Proposal is not approved by HCAP Stockholders at the HCAP Special Meeting in circumstances where HCAP has no obligation to pay to PTMN a termination fee. It is
expected that PTMN will incur approximately $1,600,000, or $0.02 per share, and HCAP will incur approximately $2,510,000, or $0.42 per share, of fees and expenses in connection with completing the Mergers.
|
Q:
|
Will I receive distributions after the Mergers?
|
A:
|
Each HCAP Stockholder who holds Non-Electing Shares at the Effective Time
will become a stockholder of PTMN and will receive any future distributions paid to PTMN Stockholders with respect to shares of PTMN Common Stock
received in the Mergers.
|
Q:
|
Are the Mergers subject to any third-party consents?
|
A:
|
Under the Merger Agreement, HCAP and PTMN have agreed to cooperate with each
other and use their respective reasonable best efforts to obtain all necessary actions or non-actions, consents and approvals from third parties to
consummate the transactions contemplated by the Merger Agreement, including the First Merger, and to make all necessary and to take all reasonable steps as may be necessary to obtain third
party approvals to consummate the transactions contemplated by the Merger Agreement, including the First Merger. There can be no assurance that any
permits, consents, approvals, confirmations or authorizations will be obtained or that such permits, consents, approvals, confirmations or authorizations will not impose conditions or requirements that, individually or in the aggregate, would or could reasonably be expected to have a material adverse effect on the financial
condition, results of operations, assets or business of the combined company following the Mergers.
|
Q:
|
How does PTMN’s investment objective, strategy and risks differ from HCAP’s?
|
A:
|
PTMN’s investment objective is to generate current income and, to a lesser
extent, capital appreciation from its investments in senior secured term loans, mezzanine debt and selected equity investments in privately-held
middle-market companies. PTMN defines the middle-market as comprising companies with earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $10 million to $50 million and/or total debt of $25 million to $150 million. PTMN primarily invests in first and second lien term loans which, because of their priority in a company’s capital
structure, it expects will have lower default rates and higher rates of recovery of principal if there is a default and which it expects will create a stable stream of interest income. The investments in PTMN’s debt securities portfolio are all or predominantly below investment grade (i.e., “junk bonds”), and have speculative characteristics with respect to the issuer’s capacity to pay interest and repay
principal.
|
Q:
|
How will the combined company be managed following the Mergers?
|
A:
|
The directors of PTMN immediately prior to the Mergers will remain the
directors of PTMN and will hold office until their respective successors are duly elected and qualify, or their earlier death, resignation or removal.
The officers of PTMN immediately prior to the Mergers will remain the officers of PTMN and will hold office until their respective successors are duly appointed and qualify, or their earlier
death, resignation or removal. Following the Mergers, PTMN will continue to be managed by Sierra Crest, and there are not expected to be any material
changes in PTMN’s investment objective or strategy. Over time, it is anticipated that PTMN will transition the investments acquired through the Mergers into investments in smaller middle-market companies, consistent with PTMN’s current investment strategy. See “The Mergers—Interests
of Certain Persons Related to HCAP in the Mergers” for information regarding the ongoing negotiations between Sierra Crest and HCAP Advisors regarding
a transition services agreement pursuant to which HCAP Advisors would provide certain consulting services to Sierra Crest relating to HCAP’s existing
investment portfolio subsequent to the Closing.
|
Q:
|
Are HCAP Stockholders able to exercise appraisal rights in connection with the Mergers?
|
A:
|
Yes. HCAP Stockholders will be entitled to exercise appraisal rights with
respect to the Mergers in accordance with Section 262 of the Delaware General Corporation Law (the “DGCL”). For more information, see “Appraisal Rights of HCAP Stockholders” and “Description of the Merger Agreement—Appraisal Rights.”
|
Q:
|
When do the parties expect to complete the Mergers?
|
A:
|
While there can be no assurance as to the exact timing, or that the Mergers
will be completed at all, PTMN and HCAP are working to complete the Mergers in the second quarter of 2021. It is currently expected that the Mergers
will be completed promptly following receipt of the HCAP Stockholder Approval (as defined below) at the HCAP Special Meeting, along with the satisfaction or (to the extent legally permissible)
waiver of the other closing conditions set forth in the Merger Agreement.
|
Q:
|
Are the Mergers expected to be taxable to HCAP Stockholders?
|
A:
|
Subject to the discussion below, the Mergers, taken together, may qualify as
a “reorganization,” within the meaning of Section 368(a) of the Code. If the Mergers qualify as a reorganization for U.S. federal income tax purposes,
U.S. holders (as defined in the section entitled “Certain Material U.S. Federal Income Tax Consequences of the
Mergers”) of HCAP Common Stock who receive a combination of shares of PTMN Common Stock and cash, other than cash in lieu of a fractional share of PTMN
Common Stock, in exchange for their HCAP Common Stock, will recognize gain (but not loss) in an amount equal to the lesser of (i) the amount by which
the sum of the fair market value of the shares of PTMN Common Stock and cash (other than cash received in lieu of a fractional share of PTMN Common Stock) received by such holder in exchange for its shares of HCAP Common Stock (such cash including the holder’s share of the Aggregate Cash Consideration (as defined below) and possibly,
as discussed below, the holder’s share of the Additional Cash Consideration) exceeds such holder’s adjusted basis in its shares of HCAP Common Stock, and
(ii) the amount of cash (other than cash received in lieu of fractional shares of PTMN Common Stock) received by such holder in exchange for its shares of HCAP Common Stock (such cash including
the holder’s share of the Aggregate Cash Consideration and possibly, as discussed below, the holder’s share of the Additional Cash Consideration).
Generally, any gain recognized upon the exchange will be capital gain, and any such capital gain will be long-term capital gain if the holding period for such shares of HCAP Common Stock is more than one year. Depending on certain facts specific to you, gain could instead be characterized as ordinary dividend income.
|
Q:
|
What happens if the Mergers are not consummated?
|
A:
|
If the Mergers are not approved by the requisite vote of HCAP Stockholders,
or if the Mergers are not completed for any other reason, HCAP Stockholders will not receive any payment for their shares of HCAP Common Stock in
connection with the Mergers. Instead, HCAP will remain an independent company. In addition, under circumstances specified in the Merger Agreement, upon notice by PTMN, HCAP may be required to pay PTMN a termination fee of approximately $2.122 million or reimburse PTMN for half of its out-of-pocket fees and expenses incurred in connection with
the transactions, subject to a maximum reimbursement amount of $500,000. Similarly, under circumstances specified in the Merger Agreement, upon notice
by HCAP, PTMN may be required to pay HCAP a termination fee of approximately $2.122 million. See “Description of the Merger
Agreement—Termination of the Merger Agreement” and “Description of the Merger
Agreement—Termination Fee; Expense Reimbursement—Reimbursement of PTMN Expenses.”
|
|
| |
PTMN
Common Stock
|
| |
HCAP
Common Stock
|
NAV per Share at December 31, 2020
|
| |
$[•]
|
| |
$[•]
|
Closing Sales Price at December 22, 2020
|
| |
$1.80
|
| |
$5.91
|
Closing Sales Price at [•], 2021
|
| |
$[•]
|
| |
$[•]
|
•
|
Because the market price of PTMN Common Stock and the NAV per share of PTMN and HCAP will fluctuate, HCAP Stockholders cannot be
sure of the market value or exact composition of the Merger Consideration they will receive until the Closing Date.
|
•
|
The Per Share Merger Consideration received by an individual HCAP Stockholder may represent an implied market value per share
less than the Closing HCAP Net Asset Value per share, and, depending on the Elections made by an HCAP Stockholder and Elections made by other HCAP Stockholders, the Per Share Merger Consideration received may represent a value per share
higher or less than the consideration received by other HCAP Stockholders calculated on the basis of the Closing PTMN Net Asset Value.
|
•
|
Sales of shares of PTMN Common Stock after the completion of the Mergers may cause the market price of PTMN Common Stock to
decline.
|
•
|
HCAP Stockholders and PTMN Stockholders will experience a reduction in percentage ownership and voting power in the combined
company as a result of the Mergers.
|
•
|
HCAP Stockholders may receive a form or combination of consideration different from what they elect.
|
•
|
PTMN may be unable to realize the benefits anticipated by the Mergers, including estimated cost savings, or it may take longer
than anticipated to realize such benefits.
|
•
|
The announcement and pendency of the proposed Mergers could adversely affect HCAP’s business, financial results and operations.
|
•
|
If the Mergers do not close, neither PTMN nor HCAP will benefit from the expenses incurred in their pursuit of the Mergers and,
under certain circumstances, HCAP will be required to pay half of PTMN’s expenses incurred in connection with the Mergers, subject to a maximum reimbursement payment of $500,000.
|
•
|
Litigation which may be filed against HCAP or PTMN in connection with the Mergers, regardless of its merits, could result in
substantial costs and could delay or prevent the Mergers from being completed.
|
•
|
The termination of the Merger Agreement could negatively impact HCAP and PTMN.
|
•
|
Under certain circumstances, PTMN and HCAP are obligated to pay each other a termination fee upon termination of the Merger
Agreement.
|
•
|
The Mergers are subject to closing conditions, including the HCAP Stockholder Approval, that, if not satisfied or waived, will
result in the Mergers not being completed, which may result in material adverse consequences to HCAP’s and PTMN’s business and operations.
|
•
|
PTMN and HCAP will be subject to operational uncertainties and contractual restrictions while the Mergers are pending, including
restrictions on pursuing alternatives to the Mergers.
|
•
|
The Merger Agreement contains provisions that could discourage or make it difficult for a third party to acquire HCAP prior to
the completion of the proposed Mergers.
|
•
|
The opinion delivered to the HCAP Special Committee from its financial advisor prior to signing the Merger Agreement will not
reflect changes in circumstances since the date of such opinion.
|
•
|
If the Mergers are not completed or HCAP is not otherwise acquired, HCAP may consider other strategic alternatives, which are
subject to risks and uncertainties.
|
•
|
Subject to applicable law, each party may waive one or more conditions to the Mergers without soliciting (or resoliciting, in
the case of HCAP) approval from its respective stockholders.
|
•
|
The shares of PTMN Common Stock to be received by HCAP Stockholders as a result of the Mergers will have different rights
associated with them than shares of HCAP Common Stock currently held by them.
|
•
|
The market price of PTMN Common Stock after the Mergers may be affected by factors different from those affecting PTMN Common
Stock currently.
|
•
|
The U.S. federal income tax treatment of the Mergers will not be known as of the date of the HCAP Special Meeting, and the
position that the Mergers qualify as a “reorganization” might be challenged by the Internal Revenue Service (“IRS”).
|
•
|
The U.S. federal income tax treatment of the Additional Cash Consideration is not entirely clear, and the position taken that
the Additional Cash Consideration is part of the total cash consideration received by HCAP Stockholders pursuant to the Mergers might be challenged by the IRS.
|
•
|
Following the closing of the Mergers, PTMN may be limited in the use of certain capital loss carryforwards and the use of
certain unrealized capital losses.
|
•
|
If PTMN sells investments acquired as a result of the Mergers, it may result in capital gains and increase the incentive fees
payable to Sierra Crest.
|
•
|
the financial terms of the Merger Agreement, including that:
|
•
|
on a market value basis, the transaction, including the Additional Cash Consideration from Sierra Crest, represents an implied
market value for HCAP Common Stock of approximately $7.71 per share, which represents approximately 79% of HCAP’s September 30, 2020 NAV per share (adjusted for expected transaction expenses) and a 30.4% premium to the closing price of
HCAP Common Stock on December 22, 2020. This implied market value is based on (i) HCAP’s adjusted September 30, 2020 NAV ($60.6 million, or $10.17 per share of HCAP Common Stock based on the outstanding shares of HCAP Common Stock as of
December 23, 2020 (the date of the Merger Agreement), as adjusted for expected transaction expenses), (ii) PTMN’s estimated October 31, 2020 NAV ($208.6 million, or $2.78 per share of PTMN Common Stock, accounting for PTMN’s merger with
GARS, which was completed on October 28, 2020 (the “PTMN/GARS Transaction”), as adjusted for expected transaction expenses), and (iii) the closing price of PTMN Common Stock on December 22, 2020 (which was the last trading day before
entering into the Merger Agreement) of $1.80;
|
•
|
on an NAV basis, HCAP Stockholders will collectively receive value per share of approximately 103.7% of the NAV per share of
HCAP Common Stock, calculated based on (i) HCAP’s adjusted September 30, 2020 NAV and the outstanding shares of HCAP Common Stock as of December 23, 2020 (the date of the Merger Agreement), (ii) the estimated NAV per share of PTMN
Common Stock as of October 31, 2020 (as adjusted for the PTMN/GARS Transaction and expected transaction expenses), and (iii) taking into account the value of the Additional Cash Consideration. The additional 3.7% premium above NAV per
share of HCAP Common Stock is a result of the Additional Cash Consideration;
|
•
|
PTMN will issue to HCAP Stockholders shares of PTMN Common Stock equal to 19.9% of the number of shares of PTMN Common Stock
issued and outstanding immediately prior to the Closing, and pay the remainder of the Merger Consideration in cash; and
|
•
|
HCAP Stockholders will have the option to elect to receive the Merger Consideration in cash, which provides immediate liquidity
and certainty of value to HCAP Stockholders, or in shares of PTMN Common Stock, subject to adjustment based on the elections of other HCAP Stockholders, and that the Jolson Letter Agreement (as defined in the section entitled “The Mergers—Background of the Mergers”) to which Mr. Jolson and HCAP are party will enhance the ability of minority HCAP Stockholders to receive cash based
on their elections.
|
•
|
the thorough review of strategic alternatives undertaken by the HCAP Special Committee and the HCAP Board;
|
•
|
certain considerations relating to the opportunities for the combined company to provide strategic and business opportunities
for its stockholders and to generate additional stockholder value, including that:
|
•
|
based on the outstanding shares and relative NAV of HCAP Common Stock and PTMN Common Stock outstanding (each as adjusted for
expected transaction expenses), as of September 30, 2020 with respect to HCAP, and as of October 31, 2020 with respect to PTMN and as estimated for pro forma adjustments to account for the PTMN/GARS Transaction, current HCAP
Stockholders would own approximately 16.6% of the combined company immediately following the completion of the Mergers;
|
•
|
the combined company will be externally managed by Sierra Crest and is expected to have total assets in excess of $658 million
total investments of approximately $582 million and NAV in excess of $250.0 million (based on HCAP’s September 30, 2020 balance sheet and PTMN’s estimated October 31, 2020 balance sheet (with pro forma adjustments for the PTMN/GARS
Transaction), not adjusted for transaction expenses);
|
•
|
following the Mergers, HCAP Stockholders are expected to benefit from (i) access to the full range of resources of Sierra Crest;
(ii) investment opportunities originated through the BC Partners Credit platform; and (iii) the utilization of BC Partners’ broader resources, including relationships and institutional knowledge from over 30 years of private market
investing;
|
•
|
the combined company’s investment portfolio following the Mergers will provide additional scale and portfolio diversification,
which will position the combined company, among other things, to (i) capitalize on favorable market conditions; (ii) originate larger transactions with increased final hold positions; and (iii) enhance access to lower cost of capital
from banks and capital market participants;
|
•
|
HCAP Stockholders of the combined company will have an ability to participate in the future growth of PTMN, including potential
upside if shares of PTMN Common Stock trades higher in the future;
|
•
|
the Mergers are expected to deliver operational synergies for the combined company as a result of the larger scale and
elimination of redundant HCAP expenses following the Mergers;
|
•
|
HCAP Stockholders are expected to realize net investment income per share accretion following the Closing;
|
•
|
the combined historical performance of HCAP and PTMN and expected ability of the combined entity to make future dividend
payments to stockholders are expected to benefit HCAP Stockholders;
|
•
|
shares of PTMN Common Stock received in exchange for shares of HCAP Common Stock may be more liquid than HCAP Common Stock,
given the increased size and diversification of the equity base of the combined company;
|
•
|
based on a review of PTMN, the belief that PTMN and BC Partners have shown the ability to successfully execute this type of
merger transaction;
|
•
|
the terms of the Merger Agreement, including that the terms of the Merger Agreement are unlikely to unduly deter third parties
from making unsolicited acquisition proposals; and
|
•
|
the risks and potential negative factors relating to the Merger Agreement.
|
•
|
changes in the business, operations or prospects of PTMN;
|
•
|
the financial condition of current or prospective portfolio companies of PTMN;
|
•
|
interest rates or general market or economic conditions;
|
•
|
market assessments of the likelihood that the Mergers will be completed and the timing of completion of the Mergers;
|
•
|
market perception of the future profitability of the combined company;
|
•
|
the duration and effects of the COVID-19 pandemic on PTMN’s and HCAP’s portfolio companies; and
|
•
|
the duration and effects of the COVID-19 pandemic on equity trading prices generally, and specifically on the trading price of
PTMN Common Stock and the common stock of the Surviving Corporation following the Mergers.
|
•
|
HCAP’s and PTMN’s businesses may have been adversely impacted by the failure to pursue other beneficial opportunities due to the
focus of management on the Mergers, without realizing any of the anticipated benefits of completing the Mergers;
|
•
|
the market prices of HCAP Common Stock and PTMN Common Stock might decline to the extent that the market price prior to
termination reflects a market assumption that the Mergers will be completed;
|
•
|
HCAP may not be able to find a party willing to pay an equivalent or more attractive price than the price PTMN agreed to pay in
the Mergers; and
|
•
|
the payment of any termination fee or reimbursement of expenses, if required under the circumstances, could adversely affect the
financial condition and liquidity of HCAP or PTMN.
|
•
|
a larger stockholder base;
|
•
|
a different portfolio composition; and
|
•
|
a different capital structure.
|
|
| |
Actual
|
| |
Pro
Forma
|
|||
Stockholder transaction expenses
|
| |
PTMN
(acquiring
fund)
|
| |
HCAP
(target
fund)
|
| |
|
Sales load (as a percentage of offering price)
|
| |
None(1)
|
| |
None(1)
|
| |
None(1)
|
Offering expenses (as a percentage of offering price)
|
| |
None(1)
|
| |
None(1)
|
| |
None(1)
|
Dividend reinvestment plan expenses
|
| |
None(2)
|
| |
None(2)
|
| |
None(1)
|
Total stockholder transaction expenses (as a percentage of offering price)
|
| |
None
|
| |
None
|
| |
None
|
|
| |
Actual
|
| |
Pro
Forma
|
|||
Estimated annual expenses (as a percentage of net assets attributable to common stock):(3)
|
| |
PTMN
(acquiring
fund)
|
| |
HCAP
(target
fund)
|
| |
|
Base management fees(4)
|
| |
[•]%
|
| |
[•]%
|
| |
[•]%
|
Incentive fees(5)
|
| |
[•]%
|
| |
[•]%
|
| |
[•]%
|
Interest payments on borrowed funds(6)
|
| |
[•]%
|
| |
[•]%
|
| |
[•]%(9)
|
Other expenses(7)
|
| |
[•]%
|
| |
[•]%
|
| |
[•]%
|
Acquired fund fees and expenses
|
| |
[•]%
|
| |
[•]%
|
| |
[•]%
|
Total annual expenses(8)
|
| |
[•]%
|
| |
[•]%
|
| |
[•]%
|
*
|
Represents an amount less than 0.1%.
|
(1)
|
Purchases of shares of PTMN Common Stock or HCAP Common Stock on the secondary market are not subject to sales charges, but may be
subject to brokerage commissions or other charges. The table does not include any sales load (underwriting discount or commission) that stockholders may have paid in connection with their purchase of shares of PTMN Common Stock or HCAP
Common Stock in a prior underwritten offering or otherwise.
|
(2)
|
The estimated expenses associated with the respective distribution reinvestment plans are included in “Other expenses.”
|
(3)
|
“Consolidated net assets attributable to common stock” equals net assets at December 31, 2020. For the pro forma columns, the
combined net assets of PTMN and HCAP on a pro forma basis as of December 31, 2020 were used.
|
(4)
|
For PTMN, the base management fee is 1.50% of PTMN’s average gross assets, excluding cash and cash equivalents, but including
assets purchased with borrowed amounts, at the end of the two most recently completed calendar quarters; provided, however, that the base management fee is 1.00% of PTMN’s average gross assets, excluding cash and cash equivalents, but
including assets purchased with borrowed amounts, that exceed the product of (i) 200% and (ii) the value of PTMN’s NAV at the end of the most recently completed calendar quarter.
|
(5)
|
PTMN’s incentive fee consists of two parts: (i) a portion based on PTMN’s pre-incentive fee net investment income (the
“Income-Based Fee”) and (ii) a portion based on the net capital gains received on PTMN’s portfolio of securities on a cumulative basis for each calendar year, net of all realized capital losses and all unrealized capital depreciation on a
cumulative basis, less the aggregate amount of any previously paid capital gains Incentive Fee (the “Capital Gains Fee”). The Income-Based Fee is 17.50% of pre-incentive fee net investment income with a 7.00% hurdle rate. The Capital
Gains Fee is 17.50%. Pursuant to an incentive fee letter agreement, Sierra Crest permanently waived incentive fees earned without recourse against or reimbursement by PTMN, to the extent necessary in order to achieve aggregate net
investment income of PTMN for a one-year period to be at least equal to $0.40 per share, subject to certain adjustments. Pursuant to such agreement, for the six months ended June 30, 2020, approximately $557,000 in incentive fees were
waived by Sierra Crest. As of July 1, 2020, all fee waivers from Sierra Crest expired.
|
(6)
|
PTMN’s interest and other debt expenses are based on borrowing levels and interest rates consistent with the levels during the
quarter ended December 31, 2020. As of December 31, 2020, PTMN had $[•] available and $[•] in borrowings outstanding under its $[•] senior secured credit facility and $[•] of total debt outstanding.
|
(7)
|
In the case of PTMN, other expenses include insurance, accounting, legal and auditing fees and state franchise taxes, as well as
the reimbursement of the compensation of administrative personnel and fees payable to PTMN’s directors who do not also serve in an executive officer capacity for PTMN or Sierra Crest. The percentage presented in the table reflects actual
amounts incurred during the year ended December 31, 2020.
|
(8)
|
“Total annual expenses” as a percentage of consolidated net assets attributable to common stock are higher than the total annual
expenses percentage would be for a company that is not leveraged. PTMN and HCAP borrow money to leverage and increase total assets. The SEC requires that the “Total annual expenses” percentage be calculated as a percentage of net assets
(defined as total assets less indebtedness and before taking into account any incentive fees payable during the period), rather than the total assets, including assets that have been funded with borrowed monies. The percentage presented
in the table reflects actual amounts incurred during the year ended December 31, 2020.
|
(9)
|
This is based on the assumption that the HCAP Credit Facility (approximately $[•] of borrowings outstanding as of December 31,
2020) will be repaid and the costs of borrowings under each respective borrowing facility after the Mergers will remain the same as those costs prior to the Mergers. PTMN expects over time that as a result of additional investment
purchases, and in turn, additional borrowings on the financing facilities after the Mergers, the combined company’s interest payments on borrowed funds may be more than the principal amounts reflected in the section entitled “Capitalization” below and, accordingly, that estimated total expenses may be different than as reflected in the table above. However, the actual amount of leverage employed at any given time cannot be
predicted.
|
|
| |
1
year
|
| |
3
years
|
| |
5
years
|
| |
10
years
|
You would pay the following expenses on a $1,000 investment:
|
| |
|
| |
|
| |
|
| |
|
PTMN, assuming a 5% annual return (assumes no return from
net realized capital gains or net unrealized capital appreciation)
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
HCAP, assuming a 5% annual return (assumes no return from
net realized capital gains or net unrealized capital appreciation)
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
|
| |
|
| |
|
| |
|
| |
|
PTMN, assuming a 5% annual return (assumes return entirely
from realized capital gains and thus subject to the capital gain incentive fee)
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
HCAP, assuming a 5% annual return (assumes return entirely
from realized capital gains and thus subject to the capital gain incentive fee)
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
|
| |
|
| |
|
| |
|
| |
|
Pro forma combined company following the Mergers
|
| |
|
| |
|
| |
|
| |
|
You would pay the following expenses on a $1,000 investment:
|
| |
|
| |
|
| |
|
| |
|
Assuming a 5% annual return (assumes no return from net
realized capital gains or net unrealized capital appreciation)
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
Assuming a 5% annual return (assumes return entirely from
realized capital gains and thus subject to the capital gain incentive fee)
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
•
|
the ability of the parties to consummate the Mergers on the expected timeline, or at all;
|
•
|
the failure of HCAP Stockholders to approve the Merger Proposal;
|
•
|
the ability to realize the anticipated benefits of the Mergers;
|
•
|
the effects of disruption on the business of PTMN and HCAP from the Mergers;
|
•
|
the effect that the announcement or consummation of the Mergers may have on the trading price of PTMN Common Stock;
|
•
|
the effect that the announcement or consummation of the Mergers may have on the trading price of HCAP Common Stock;
|
•
|
the combined company’s plans, expectations, objectives and intentions, as a result of the Mergers;
|
•
|
any potential termination of the Merger Agreement or action of HCAP Stockholders with respect to any proposed transaction;
|
•
|
changes in PTMN’s and/or HCAP’s NAV;
|
•
|
changes in the market price of PTMN Common Stock;
|
•
|
PTMN’s and HCAP’s future operating results;
|
•
|
PTMN’s and HCAP’s business prospects and the prospects of their respective portfolio companies;
|
•
|
the effect of investments that PTMN and HCAP expect to make and the competition for those investments;
|
•
|
PTMN’s and HCAP’s contractual arrangements and relationships with third parties, including with respect to portfolio companies and
lenders;
|
•
|
actual and potential conflicts of interest with PTMN and HCAP, and their respective affiliates;
|
•
|
the dependence of PTMN’s and HCAP’s future success on the general economy and its effect on the industries in which they invest;
|
•
|
the ability of PTMN’s and HCAP’s portfolio companies to achieve their objectives;
|
•
|
the use of borrowed money to finance a portion of PTMN’s and HCAP’s investments;
|
•
|
the adequacy of financing sources and working capital;
|
•
|
the timing of cash flows, if any, from the operations of PTMN’s and HCAP’s portfolio companies;
|
•
|
general economic and political trends and other external factors;
|
•
|
changes in interest rates, including the decommissioning of London Interbank Offered Rate (“LIBOR”);
|
•
|
the ability of Sierra Crest and HCAP Advisors to locate suitable investments for PTMN and HCAP and to monitor and administer their
respective investments;
|
•
|
the ability of Sierra Crest and HCAP Advisors or their affiliates to attract and retain highly talented professionals;
|
•
|
PTMN’s and HCAP’s ability to qualify and maintain their respective qualifications as a RIC and as a BDC;
|
•
|
general price and volume fluctuations in the stock markets;
|
•
|
the effect of changes to tax legislation and PTMN’s and HCAP’s respective tax position;
|
•
|
the duration and effects of the COVID-19 pandemic on PTMN’s and HCAP’s portfolio companies; and
|
•
|
an economic downturn, including as a result of the impact of the COVID-19 pandemic, that could have a material adverse effect on
PTMN’s and HCAP’s portfolio companies’ results of operations and financial condition, which could lead to a loss on some or all of PTMN’s and HCAP’s investments in such portfolio companies and have a material adverse effect on PTMN’s and
HCAP’s results of operations and financial condition.
|
•
|
By Internet: www.proxyvote.com
|
•
|
By telephone: [•] to reach a toll-free, automated touchtone voting line, [•] Monday
through Friday 9:00 a.m. until 10:00 p.m. Eastern Time to reach a toll-free, live operator line.
|
•
|
By mail: You may vote by proxy by following the directions and indicating your
instructions on the enclosed proxy card, dating and signing the proxy card, and promptly returning the proxy card in the envelope provided, which requires no postage if mailed in the United States. Please allow sufficient time for your
proxy card to be received on or prior to 11:59 p.m., Eastern Time, on [•], 2021.
|
•
|
delivering a written revocation notice before 11:59 p.m. Eastern Time on [•], 2021 to HCAP’s corporate secretary, William E.
Alvarez, Jr., at Harvest Capital Credit Corporation, 767 Third Avenue, 29th Floor, New York, NY 10017, Attention: Corporate Secretary;
|
•
|
voting again using the telephone or Internet before 11:59 p.m. Eastern Time on [•], 2021 (your latest telephone or Internet proxy
is the one that will be counted); or
|
•
|
attending and voting during the HCAP Special Meeting. Simply logging into the HCAP Special Meeting will not, by itself, revoke
your proxy.
|
|
| |
As of December 31, 2020
(unaudited, dollar amounts in thousands, except share and per share
data)
|
|||||||||
|
| |
Actual
|
| |
Actual
|
| |
Pro forma
Adjustments
|
| |
Pro Forma
|
|
| |
PTMN
|
| |
HCAP
|
| |
PTMN(3)
|
|||
Cash, cash equivalents and restricted cash
|
| |
$[•]
|
| |
$[•]
|
| |
$[•](1)
|
| |
$[•]
|
Debt less unamortized debt issuance costs
|
| |
[•]
|
| |
[•]
|
| |
[•]
|
| |
[•]
|
Net Assets
|
| |
[•]
|
| |
[•]
|
| |
[•](2)
|
| |
[•]
|
Total Capitalization
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
| |
$[•]
|
Number of common shares outstanding
|
| |
[•]
|
| |
[•]
|
| |
[•]
|
| |
[•]
|
NAV per common share
|
| |
$[•]
|
| |
$[•]
|
| |
|
| |
$[•]
|
(1)
|
Pro Forma adjustments reflect the impact of the $[•] special payment to HCAP Stockholders, combined transaction expenses of
approximately $[•], net of asset sales, of approximately $[•] and the net settlement prior to closing of miscellaneous net liabilities as of December 31, 2020 of approximately $[•] million.
|
(2)
|
Includes cash payment to stockholders of approximately $[•], transaction expenses of PTMN of approximately $[•]; transaction
expenses of HCAP of approximately $[•] and write-off of HCAP deferred financing costs of approximately $[•].
|
(3)
|
The $[•] pro forma NAV per common share decrease is a result of estimated PTMN transaction expenses.
|
•
|
on a market value basis, the transaction, including the Additional Cash Consideration from Sierra Crest, represents an implied
market value for HCAP Common Stock of approximately $7.71 per share, which represents approximately 79% of HCAP’s September 30, 2020 NAV per share (adjusted for expected transaction expenses) and a 30.4% premium to the closing price of
HCAP Common Stock on December 22, 2020. This implied market value is based on (i) HCAP’s adjusted September 30, 2020 NAV ($60.6 million, or $10.17 per share of HCAP Common Stock based on the outstanding shares of HCAP Common Stock as of
December 23, 2020 (the date of the Merger Agreement), as adjusted for expected transaction expenses), (ii) PTMN’s estimated October 31, 2020 NAV ($208.6 million, or $2.78 per share of PTMN Common Stock, accounting for the PTMN/GARS
Transaction, as adjusted for expected transaction expenses), and (iii) the closing price of PTMN Common Stock on December 22, 2020 (which was the last trading day before entering into the Merger Agreement) of $1.80;
|
•
|
on an NAV basis, HCAP Stockholders will collectively receive value per share of approximately 103.7% of the NAV per share of HCAP
Common Stock, calculated based on (i) HCAP’s adjusted September 30, 2020 NAV and the outstanding shares of HCAP Common Stock as of December 23, 2020 (the date of the Merger Agreement), (ii) the estimated NAV per share of PTMN Common Stock
as of October 31, 2020 (as adjusted for the PTMN/GARS Transaction and expected transaction expenses), and (iii) taking into account the value of the Additional Cash Consideration. The additional 3.7% premium above NAV per share of HCAP
Common Stock is a result of the Additional Cash Consideration;
|
•
|
PTMN will issue to HCAP Stockholders shares of PTMN Common Stock equal to 19.9% of the number of shares of PTMN Common Stock
issued and outstanding immediately prior to the Closing, and pay the remainder of the Merger Consideration in cash; and
|
•
|
HCAP Stockholders will have the option to elect to receive the Merger Consideration in cash, which provides immediate liquidity
and certainty of value to HCAP Stockholders, or in shares of PTMN Common Stock, subject to adjustment based on the elections of other HCAP Stockholders, and that the Jolson Letter Agreement to which Mr. Jolson and HCAP are party will
enhance the ability of minority HCAP Stockholders to receive cash based on their elections.
|
•
|
the HCAP Special Committee and HCAP Board reviewed a range of options, including continuing to operate HCAP on a standalone basis,
a full liquidation of HCAP, internalization of HCAP Advisors’ investment advisory function, and various sale/merger transactions, including a stock sale, asset sale, merger or reverse merger, as well as other strategic transactions;
|
•
|
the HCAP Special Committee reviewed with KBW all indications of interest received during the Initial Strategic Evaluation Process
coordinated by JMP Securities, directed KBW to contact, or coordinate the response to, nine potential strategic partners during the Formal Strategic Evaluation Process, all of which executed confidentiality agreements, and reviewed with
KBW five indications of interest received from parties participating in the Formal Strategic Evaluation Process;
|
•
|
the beliefs of the HCAP Special Committee and HCAP Board (other than directors affiliated with HCAP Advisors, who abstained from
voting), formed based on a review of the results of the strategic review process, which were evaluated with the assistance of HCAP’s management and certain outside advisors, that the Mergers are more favorable to HCAP Stockholders than
other opportunities and alternatives reasonably available to HCAP, taking into account the potential risks, rewards and uncertainties associated with each alternative, including, among other opportunities and alternatives, the following:
(i) pursuing business combinations with entities other than PTMN; (ii) pursuing a full liquidation of HCAP; and (iii) continuing to operate HCAP on a standalone basis;
|
•
|
the beliefs of the HCAP Special Committee and HCAP Board (other than directors affiliated with HCAP Advisors, who abstained from
voting), which beliefs were formed after consultation with HCAP’s management and certain outside advisors, that prolonging the discussions with PTMN or continuing to solicit interest from additional third parties would be unlikely to lead
to a better offer and could have resulted in the loss of PTMN’s proposed offer;
|
•
|
the fact that each of Mr. Jolson and certain entities controlled or influenced by Mr. Jolson has entered into a Voting Agreement
with PTMN and intends to vote their respective covered shares of HCAP Common Stock in favor of the Mergers, contributing to the certainty of obtaining the required stockholder approval for the Merger Proposal;
|
•
|
the fact that HCAP entered into the Jolson Letter Agreement with Mr. Jolson, under which Mr. Jolson has agreed (i) to elect to
receive shares of PTMN Common Stock as consideration in connection with the Mergers for all of the Jolson Shares, (ii) to not, directly or indirectly, transfer, sell, offer, exchange, assign, pledge, convey any legal or beneficial
ownership interest in or otherwise dispose of, or encumber any of the Jolson Shares or enter into any contract, option, or other agreement with respect to, or consent to, a transfer of, any of the Jolson Shares or his voting or economic
interest therein other than pursuant to the Merger Agreement and in connection with the Mergers during the period commencing on the date of the Jolson Letter Agreement and ending on the Closing Date and (iii) to not transfer any shares of
the Locked Up Securities or enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Locked Up Securities for 90 days following the Closing; the Jolson Letter
Agreement enhances the ability of minority HCAP Stockholders to receive cash based on their elections and will provide a form of post-closing secondary market trading support to minority HCAP Stockholders for a period of time;
|
•
|
PTMN’s obligation to complete the Mergers is not conditioned upon receipt of financing, and each of PTMN and Sierra Crest has
represented that it will have sufficient cash or sources of cash to enable it to pay the respective amounts due at the Closing; and
|
•
|
PTMN Stockholder approval is not required for the Mergers, contributing to additional likelihood of closing with PTMN.
|
•
|
based on the outstanding shares and relative NAV of HCAP Common Stock and PTMN Common Stock outstanding (each as adjusted for
expected transaction expenses), as of September 30, 2020 with respect to HCAP, and as of October 31, 2020 with respect to PTMN and as estimated for pro forma adjustments to account for the PTMN/GARS Transaction, current HCAP Stockholders
would own approximately 16.6% of the combined company immediately following the completion of the Mergers;
|
•
|
the combined company will be externally managed by Sierra Crest and is expected to have total assets in excess of $658 million,
total investments of approximately $582 million and NAV in excess of $250.0 million (based on HCAP’s September 30, 2020 balance sheet and PTMN’s estimated October 31, 2020 balance sheet (with pro forma adjustments for the PTMN/GARS
Transaction), not adjusted for transaction expenses);
|
•
|
following the Mergers, HCAP Stockholders are expected to benefit from (i) access to the full range of resources of Sierra Crest;
(ii) investment opportunities originated through the BC Partners Credit platform; and (iii) the utilization of BC Partners’ broader resources, including relationships and institutional knowledge from over 30 years of private market
investing;
|
•
|
the combined company’s investment portfolio following the Mergers will provide additional scale and portfolio diversification,
which will position the combined company, among other things, to (i) capitalize on favorable market conditions; (ii) originate larger transactions with increased final hold positions; and (iii) enhance access to lower cost of capital from
banks and capital market participants;
|
•
|
HCAP Stockholders of the combined company will have an ability to participate in the future growth of PTMN, including potential
upside if shares of PTMN Common Stock trades higher in the future;
|
•
|
the Mergers are expected to deliver operational synergies for the combined company as a result of the larger scale and elimination
of redundant HCAP expenses following the Mergers;
|
•
|
HCAP Stockholders are expected to realize net investment income per share accretion following the Closing;
|
•
|
the combined historical performance of HCAP and PTMN and expected ability of the combined entity to make future dividend payments
to stockholders are expected to benefit HCAP Stockholders;
|
•
|
shares of PTMN Common Stock received in exchange for shares of HCAP Common Stock may be more liquid than HCAP Common Stock, given
the increased size and diversification of the equity base of the combined company;
|
•
|
based on a review of PTMN, the belief that PTMN and BC Partners have shown the ability to successfully execute this type of merger
transaction;
|
•
|
Sierra Crest, which serves as the investment adviser to PTMN, will serve as investment adviser to the combined company
post-closing and, as a result, HCAP Stockholders who continue to hold shares of the combined company following the Closing will:
|
○
|
as compared to HCAP Advisors’ current 2.0% management fee on gross assets up to and including $350 million, benefit from a reduced base management fee under the PTMN Investment Advisory Agreement calculated at an annual rate of 1.50% of the combined company’s
average gross assets, excluding cash and cash equivalents, but including assets purchased with borrowed amounts, at the end of the two most recently completed
calendar quarters; provided, however, that the base management fee under the PTMN Investment Advisory Agreement will be 1.00% of the combined
|
○
|
as compared to the current 20% income-based incentive fee and 20% capital gains fee under the HCAP Investment Advisory Agreement, benefit from PTMN’s 17.50% Income-Based Fee and 17.50% Capital Gains Fee under the PTMN Investment Advisory Agreement.
|
•
|
HCAP’s knowledge of PTMN’s business, operations, financial condition, earnings and prospects, taking into account the results of
HCAP’s and HCAP Advisors’ business and legal due diligence review of PTMN’s operations, its portfolio companies and other corporate and financial matters and the review conducted by HCAP and HCAP Advisors uncovered no significant issues.
|
•
|
the fact that the Merger Agreement is unlikely to unduly deter third parties from making unsolicited acquisition proposals given
that:
|
○
|
the Merger Agreement does not preclude HCAP from responding to and negotiating with respect to certain unsolicited acquisition proposals from third parties made prior to the time that HCAP Stockholders approve the Mergers and the Merger Agreement if any such third
party makes an unsolicited acquisition proposal that the HCAP Board determines in good faith, after consultation with its financial advisors and outside legal
counsel, constitutes or could reasonably be expected to lead to a “superior proposal” (as defined in the Merger Agreement) and that the failure of the HCAP
Board to respond to such superior proposal would reasonably be expected to be inconsistent with the fiduciary duties of the HCAP Board under the DGCL; and
|
○
|
if, prior to the time that HCAP Stockholders approve the Merger Agreement, the HCAP Board determines in good faith, after consultation with its financial advisor and outside legal counsel, that an unsolicited acquisition proposal constitutes a superior proposal,
then, after complying with PTMN’s customary “matching rights,” the HCAP Board can terminate the Merger Agreement in order to substantially concurrently enter
into a binding definitive agreement with respect to such superior proposal if the failure to do so would reasonably be expected to be inconsistent with its fiduciary
duties under the DGCL, provided that, concurrently with such termination, HCAP will, at PTMN’s option, pay PTMN a termination fee of approximately $2.122 million or, in the event that HCAP shall have materially breached its obligations under the Merger Agreement, pay PTMN for damages subject to certain caps.
|
•
|
the fact that the Merger Agreement includes customary terms, including customary non-solicitation, closing and termination
provisions;
|
•
|
the fact that the consideration and negotiation of the Merger Agreement was conducted through extensive arms-length negotiations
under the oversight of the HCAP Special Committee, which is composed solely of the HCAP Independent Directors; and
|
•
|
the fact that the Merger Agreement includes a reciprocal termination fee of approximately $2.122 million, or approximately 3.5% of
HCAP’s NAV as of September 30, 2020, which the HCAP Special Committee and HCAP Board believe is reasonable and would not preclude or substantially impede a possible superior proposal from being made, especially in light of the strategic
alternatives review process undertaken by HCAP.
|
•
|
the fact that changes in the NAV of HCAP and PTMN before the completion of the Mergers may affect the amount and composition of
the Aggregate Merger Consideration to be received by HCAP Stockholders, and changes in the market price of PTMN Common Stock may affect the market value of the Total Stock Consideration to be received by HCAP Stockholders;
|
•
|
the restrictions in the Merger Agreement on HCAP’s ability to respond to and negotiate certain unsolicited acquisition proposals
from third parties, the requirement that HCAP pay PTMN an approximate $2.122 million termination fee if the Merger Agreement is terminated under certain circumstances and the risk that such restrictions and termination fee may discourage
third parties that might otherwise have an interest in a business combination with, or acquisition of, HCAP from making unsolicited acquisition proposals;
|
•
|
the fact that there can be no assurance that the combined company will succeed or otherwise achieve its projected financial
results;
|
•
|
the possibility that the consummation of the Mergers may be delayed or not occur at all, and the possible significant adverse
impact that such event would have on HCAP and its business;
|
•
|
the existence of restrictions on the conduct of HCAP’s business during the period between execution of the Merger Agreement and
the closing thereof, which may delay or prevent HCAP from undertaking business opportunities that may arise during such time which, absent the Merger Agreement, HCAP might otherwise have pursued;
|
•
|
the potential disruption to HCAP’s business that may result from the announcement of the Mergers and the resulting distraction of
management’s attention from day-to-day operation of the business;
|
•
|
the fact that the income-based incentive fee under the PTMN Investment Advisory Agreement is subject to a 1.75% quarterly hurdle
rate as opposed to 2% under the HCAP Investment Advisory Agreement and is not subject to a three-year total return requirement similar to the provision included in the HCAP Investment Advisory Agreement;
|
•
|
the risk that HCAP Stockholders may vote down the Merger Proposal at the HCAP Special Meeting; and
|
•
|
the fact that HCAP will be required to pay termination fees to PTMN if the Merger Agreement is terminated under certain
circumstances.
|
•
|
a draft of the Merger Agreement, dated December 22, 2020 (the most recent draft then made available to KBW);
|
•
|
the audited financial statements and Annual Reports on Form 10-K for the three fiscal years ended December 31, 2019 of HCAP;
|
•
|
the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2020,
June 30, 2020 and September 30, 2020 of HCAP;
|
•
|
the audited financial statements and Annual Reports on Form 10-K for the three fiscal years ended December 31, 2019 of PTMN;
|
•
|
the unaudited quarterly financial statements and Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2020,
June 30, 2020 and September 30, 2020 of PTMN;
|
•
|
certain other interim reports and other communications of HCAP and PTMN provided to their respective stockholders; and
|
•
|
certain other financial information concerning the businesses and operations of HCAP and PTMN that was furnished to KBW by HCAP
and PTMN or KBW was otherwise directed to use for purposes of its analysis.
|
•
|
the historical and current financial position and results of operations of HCAP and PTMN;
|
•
|
the assets and liabilities of HCAP and PTMN;
|
•
|
the nature and terms of certain other merger transactions and business combinations in the BDC industry;
|
•
|
a comparison of certain financial and stock market information for HCAP and PTMN with similar information for certain other
companies the securities of which are publicly traded;
|
•
|
financial and operating forecasts and projections of HCAP that were prepared by, and provided to KBW and discussed with KBW by
HCAP management and that were used and relied upon by KBW at the direction of such management and with the consent of the HCAP Special Committee; and
|
•
|
publicly available consensus “street estimates” of PTMN (as adjusted by PTMN management in the case of 2021 net investment
income), as well as assumed long-term PTMN growth rates provided to KBW by PTMN management, all of which information was discussed with KBW by PTMN management and used and relied upon by KBW based on such discussions, at the direction of
HCAP management and with the consent of the HCAP Special Committee.
|
•
|
the Mergers and any related transactions would be completed substantially in accordance with the terms set forth in the Merger
Agreement (the final terms of which KBW assumed would not differ in any respect material to its analyses from the draft reviewed by KBW and referred to above), with no adjustments to the Aggregate Merger Consideration and no other
consideration or payments in respect of HCAP Common Stock;
|
•
|
the representations and warranties of each party in the Merger Agreement and in all related documents and instruments referred to
in the Merger Agreement were true and correct;
|
•
|
each party to the Merger Agreement and all related documents would perform all of the covenants and agreements required to be
performed by such party under such documents;
|
•
|
there were no factors that would delay or subject to any adverse conditions, any necessary regulatory or governmental approval for
the Mergers or any related transaction and all conditions to the completion of the Mergers and any related transaction would be satisfied without any waivers or modifications to the Merger Agreement or any of the related documents; and
|
•
|
in the course of obtaining the necessary regulatory, contractual, or other consents or approvals for the Mergers and any related
transaction, no restrictions, including any divestiture requirements, termination or other payments or amendments or modifications, would be imposed that would have a material adverse effect on the future results of operations or
financial condition of HCAP, PTMN or the pro forma entity, or the Mergers.
|
•
|
the underlying business decision of HCAP to engage in the Mergers or enter into the Merger Agreement;
|
•
|
the relative merits of the Mergers as compared to any strategic alternatives that are, have been or may be available to or
contemplated by HCAP, the HCAP Special Committee or the HCAP Board;
|
•
|
the fairness of the amount or nature of any compensation to any of HCAP’s officers, directors or employees, or any class of such
persons, relative to the compensation to the holders of HCAP Common Stock;
|
•
|
the effect of the Mergers or any related transaction on, or the fairness of the consideration to be received by, holders of any
class of securities of HCAP (other than the holders of HCAP Common Stock, collectively as a group, solely with respect to the Aggregate Merger Consideration (as described in KBW’s opinion) and not relative to the consideration to be
received by holders of any other class of securities) or holders of any class of securities of PTMN or any other party to any transaction contemplated by the Merger Agreement;
|
•
|
whether PTMN had sufficient cash, available lines of credit or other sources of funds to enable it to pay the Aggregate Cash
Consideration to the holders of HCAP Common Stock at the Closing;
|
•
|
whether Sierra Crest had sufficient cash, available lines of credit or other sources of funds to enable it to pay the Additional
Cash Consideration to the holders of HCAP Common Stock;
|
•
|
any elections by holders of HCAP Common Stock to receive Cash Consideration in lieu of Stock Consideration or the actual
allocation between cash and stock among such holders (including, without limitation, any reallocation thereof as a result of proration pursuant to the Merger Agreement), or the relative fairness of the Cash Consideration and the Stock
Consideration;
|
•
|
the actual value of PTMN Common Stock to be issued in the First Merger;
|
•
|
the prices, trading range or volume at which PTMN Common Stock or HCAP Common Stock would trade following the public announcement
of the Mergers (including the PTMN Per Share Price) or the prices, trading range or volume at which PTMN Common Stock would trade following the consummation of the Mergers;
|
•
|
any advice or opinions provided by any other advisor to any of the parties to the Merger Agreement or any other transaction
contemplated by the Merger Agreement; or
|
•
|
any legal, regulatory, accounting, tax or similar matters relating to HCAP, PTMN, their respective stockholders, or relating to or
arising out of or as a consequence of the Mergers or any related transaction, including whether or not the Mergers would qualify as a tax-free reorganization for United States federal income tax purposes.
|
Oxford Square Capital Corp.
|
First Eagle Alternative Capital BDC, Inc.
|
OFS Capital Corporation
|
Medley Capital Corporation
|
Investcorp Credit Management BDC Inc.
|
Great Elm Capital Corp.
|
Capitala Finance Corp.
|
PennantPark Investment Corporation
|
| |
Oaktree Strategic Income Corporation
|
Gladstone Capital Corporation
|
| |
Stellus Capital Investment Corporation
|
WhiteHorse Finance, Inc.
|
| |
BlackRock Capital Investment Corporation
|
Solar Senior Capital Ltd.
|
| |
Monroe Capital Corporation
|
Horizon Technology Finance Corporation
|
| |
MVC Capital, Inc.
|
Saratoga Investment Corp.
|
| |
|
|
| |
|
| |
|
| |
Selected Companies – Market Capitalization Less than $150M
|
|||||||||||||||
|
| |
HCAP
|
| |
Proposed
Transaction
|
| |
Low
|
| |
25th
Percentile
|
| |
Average
|
| |
Median
|
| |
75th
Percentile
|
| |
High
|
Price / NAV per share
|
| |
0.58x
|
| |
0.76x
|
| |
0.36x
|
| |
0.55x
|
| |
0.60x
|
| |
0.58x
|
| |
0.68x
|
| |
0.78x
|
Price / MRQ annualized NII
|
| |
10.3x
|
| |
13.4x
|
| |
5.7x
|
| |
8.6x
|
| |
9.4x
|
| |
9.0x
|
| |
10.5x
|
| |
13.3x
|
Price / 2020 EPS
|
| |
NM
|
| |
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
NM
|
| |
NM
|
Price / 2021 EPS
|
| |
19.4x
|
| |
|
| |
5.7x
|
| |
8.3x
|
| |
9.6x
|
| |
9.2x
|
| |
9.5x
|
| |
16.1x
|
|
| |
|
| |
All Selected Companies
|
|||||||||||||||
|
| |
PTMN
|
| |
Low
|
| |
25th
Percentile
|
| |
Average
|
| |
Median
|
| |
75th
Percentile
|
| |
High
|
Price / NAV per share
|
| |
0.65x
|
| |
0.36x
|
| |
0.59x
|
| |
0.75x
|
| |
0.76x
|
| |
0.86x
|
| |
1.19x
|
Price / MRQ annualized NII
|
| |
7.4x
|
| |
5.7x
|
| |
8.7x
|
| |
12.2x
|
| |
10.3x
|
| |
11.7x
|
| |
46.1x
|
Price / 2020 EPS
|
| |
NM
|
| |
9.6x
|
| |
10.7x
|
| |
18.0x
|
| |
20.9x
|
| |
24.1x
|
| |
24.5x
|
Price / 2021 EPS
|
| |
6.7x
|
| |
5.7x
|
| |
8.1x
|
| |
10.9x
|
| |
9.8x
|
| |
12.0x
|
| |
25.2x
|
|
| |
Implied Value Per Share Ranges
of HCAP Common Stock
|
Based on NAV per share of HCAP as of September 30, 2020
|
| |
$5.55 to $6.95
|
Based on annualized NII per share of HCAP for the 3-month
period ended September 30, 2020
|
| |
$4.92 to $6.00
|
Acquirer
|
| |
Acquired Company
|
FS KKR Capital Corp.
|
| |
FS KKR Capital Corp. II
|
Oaktree Specialty Lending Corp
|
| |
Oaktree Strategic Income Corp
|
Barings BDC, Inc.
|
| |
MVC Capital, Inc.
|
PTMN
|
| |
GARS
|
Goldman Sachs BDC, Inc.
|
| |
Goldman Sachs Middle Market Lending Corp.
|
Crescent Capital BDC, Inc.
|
| |
Alcentra Capital Corp.
|
PTMN
|
| |
OHA Investment Corporation
|
East Asset Management, LLC
|
| |
Rand Capital Corporation
|
Golub Capital BDC, Inc.
|
| |
Golub Capital Investment Corporation
|
FS Investment Corporation
|
| |
Corporate Capital Trust, Inc.
|
Benefit Street Partners LLC; Barings
|
| |
Triangle Capital Corporation
|
TCG BDC, Inc.
|
| |
NF Investment Corp.
|
CĪON Investment Corporation
|
| |
Credit Suisse Park View BDC, Inc.
|
MAST Capital Management LLC; Great Elm Capital Group Inc.
|
| |
Full Circle Capital Corporation
|
Ares Capital Corporation
|
| |
American Capital, Ltd.
|
PennantPark Floating Rate Capital Ltd.
|
| |
MCG Capital Corporation
|
Saratoga Investment Corp.
|
| |
GSC Investment Corp.
|
Ares Capital Corporation
|
| |
Allied Capital Corporation
|
Prospect Capital Corporation
|
| |
Patriot Capital Funding, Inc.
|
Highland Credit Strategies Fund
|
| |
Highland Distressed Opportunities, Inc.
|
•
|
Price to NAV per share of the acquired company; and
|
•
|
Price to latest 12 months net investment income per share of the acquired company.
|
|
| |
|
| |
Selected BDC Transactions
|
|||||||||||||||
|
| |
Proposed
Transaction
|
| |
Low
|
| |
25th
Percentile
|
| |
Average
|
| |
Median
|
| |
75th
Percentile
|
| |
High
|
Price / NAV Per Share
|
| |
75.8%
|
| |
40.0%
|
| |
61.7%
|
| |
80.3%
|
| |
80.7%
|
| |
100.0%
|
| |
117.0%
|
Price / LTM NII Per Share
|
| |
14.3x
|
| |
2.4x
|
| |
5.5x
|
| |
8.7x
|
| |
9.6x
|
| |
10.7x
|
| |
13.5x
|
One-Day Premium
|
| |
37.1%
|
| |
(39.9)%
|
| |
0.9%
|
| |
31.8%
|
| |
24.4%
|
| |
36.6%
|
| |
222.0%
|
30-Day Premium
|
| |
155.2%
|
| |
(22.3)%
|
| |
(6.0)%
|
| |
32.8%
|
| |
22.5%
|
| |
33.3%
|
| |
162.7%
|
|
| |
|
| |
Selected BDC Transactions Involving Non-Affiliates
|
|||||||||||||||
|
| |
Proposed
Transaction
|
| |
Low
|
| |
25th
Percentile
|
| |
Average
|
| |
Median
|
| |
75th
Percentile
|
| |
High
|
Price / NAV Per Share
|
| |
75.8%
|
| |
40.0%
|
| |
60.9%
|
| |
77.3%
|
| |
78.2%
|
| |
99.9%
|
| |
107.8%
|
Price / LTM NII Per Share
|
| |
14.3x
|
| |