FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


FS/KKR Announces Closing of Merger of FS Investment Corporation and Corporate Capital Trust

December 20, 2018, 07:30 AM
Filed Under: Mergers & Acquisitions

FS/KKR Advisor, LLC (FS/KKR), a partnership between FS Investments and KKR Credit Advisors (US) LLC, announced that the merger of FS Investment Corporation ( and Corporate Capital Trust, Inc. has closed, creating the second-largest publicly traded business development company. With the closing of the merger, FS Investment Corporation has been renamed FS KKR Capital Corp. (FSK) and will begin trading on the New York Stock Exchange under the ticker symbol "FSK" on December 20, 2018.

"Combining FSIC and CCT represents an important milestone for our franchise in our quest to drive consistent and sustained value for our investors," said Michael Forman, Chief Executive Officer of FSK. "We believe the business and operational synergies this merger is expected to create – including lower administrative costs, a more diversified investment portfolio and an optimized capital structure – position us well to deliver on that objective."

Cash Distribution and Exchange Ratio

CCT's board of directors previously declared a conditional special cash distribution of at least $0.402 per share, which will be paid on or about December 27, 2018 to stockholders of record as of the close of business on December 18, 2018. Prior to the closing of the merger, CCT determined that the amount of such special cash distribution will be $0.506 per share.

Based on the final merger exchange ratio reported by FSK today, CCT shareholders will receive 2.3552 FSK shares for each share of CCT held, subject to payment of cash in lieu of fractional shares. 

Share Repurchase Program

Concurrent with today's closing announcement, FSK's board of directors has authorized a share repurchase program. Under the program, FSK may repurchase up to $200 million in the aggregate of its outstanding common stock in the open market at prices below the current net asset value per share.

The timing, manner, price and amount of any share repurchases will be determined by FSK, based upon the evaluation of economic and market conditions, FSK's stock price, applicable legal and regulatory requirements and other factors. The program will be in effect through December 19, 2019, unless extended, or until the aggregate repurchase amount that has been approved by FSK's board of directors has been expended. The program may be suspended, extended, modified or discontinued at any time.

FSK currently intends to release preliminary financial information as of and for the year ended December 31, 2018 in mid-January 2019 to allow potential repurchases to commence.

Todd Builione, President of FSK, added, "We believe buying shares of FSK is a compelling opportunity. Given current trading and dividend levels, investors are able to earn a 13% annual dividend yield with the potential for significant market price appreciation through convergence to fundamental book value. Our board has authorized a $200 million share repurchase program, which reflects our perspective on this buying opportunity and confidence in our investment portfolio and broader franchise."

Previously on ABL Advisor: FS/KKR to Merge FS Investment Corporation and Corporate Capital Trust

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.