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Crescent BDC to acquire Alcentra Capital
Posted on Wednesday, 14 August 2019 09:54
Crescent Capital BDC is picking up senior secured debt and equity capital provider Alcentra Capital for a total USD 141.90 million in cash and stock, subject to certain post-closing adjustments.

The deal will comprise the exchange of 12.90 million shares in the target for USD 19.30 million in cash, or USD 1.50 per stock, while 5.20 million scrips in the buyer and USD 21.60 million cash from the acquiror’s investment advisor will also be issued.

Any final dividend that Alcentra Capital must pay in connection with the transaction which is more than the group’s regular quarterly dividends will reduce the cash consideration to be paid by Crescent BDC on a dollar-for-dollar basis.

The total offer price is around USD 11.02 per stock, representing 1.0x the target’s net asset value per share as of 30th June 2019 and a 35.7 per cent premium on its close of USD 8.12 on 12th August 2019, the last trading day prior to the announcement.

Scrips in Alcentra Capital improved 13.8 per cent to USD 9.24 yesterday, at a market capitalisation of USD 118.97 million.

Crescent Cap Advisors will provide significant financial support to the deal, including USD 1.68 per share of the total USD 3.18 per stock cash consideration.

Following completion, expected in the fourth quarter of 2019, the buyer’s investors will control 81.0 per cent of the combined company, with the target’s backers holding the remaining 19.0 per cent.

The deal comes after Alcentra Capital announced it was reviewing strategic alternatives in April and the acquisition remains subject to shareholder and regulatory approvals.

Last week, the group announced it had total investment income of USD 6.10 million, net investment income of USD 2.50 million and USD 28.60 million injected into six new portfolio companies, with its net asset value totalling USD 141.90 million during the quarter ended 30th June 2019.

In connection with the transaction, Crescent BDC, which stands for business development company, is expected to receive a USD 200.00 million leverage facility from Ally Bank by the end of this month.

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