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Garrison Capital to Merge with Portman Ridge Finance Corporation

June 25, 2020, 09:05 AM
Filed Under: Mergers & Acquisitions
Related: Garrison Capital

Garrison Capital Inc. (GARS) and Portman Ridge Finance Corporation (PTMN) announced that they have entered into a definitive agreement under which Garrison will merge with and into Portman Ridge, a business development company managed by Sierra Crest Investment Management LLC (“Sierra Crest”), an affiliate of BC Partners Advisors L.P. (“BC Partners”) and LibreMax Capital LLC.

The transaction is the result of the previously announced review of strategic alternatives by GARS and has been approved by a unanimous vote of the Board of Directors of GARS (on the unanimous recommendation of the Special Committee of the Board of Directors of GARS) and the Board of Directors of PTMN.

The combined company will be externally managed by Sierra Crest and, based on the respective March 31, 2020 balance sheets, not adjusted for transaction expenses, would have had total investments of approximately $638.5 million, and a net asset value of approximately $207.0 million;

The parties currently expect the transaction to be completed in the fourth calendar quarter of 2020.

“After a robust and thorough strategic alternatives process conducted by the Board of Directors, we believe this transaction is an excellent result for the GARS stockholders, along with continuing the growth objective and value creation for PTMN stockholders,” said Joseph Tansey, Chairman and Chief Executive Officer of GARS. “In addition to a significant cash consideration component, we believe the continued ownership of PTMN stock and their affiliation with the BCP Credit team and the overall BC Partners platform will provide stockholders with enhanced value and significant future upside.”

“We are very excited to merge Garrison Capital Inc. with Portman Ridge Finance Corporation, as it represents the continued execution of our vision for consolidation in the BDC space and is expected to be an accretive transaction for GARS and PTMN stockholders. With the combined entity being almost double the size of either current company, we believe stockholders will benefit from larger scale and hold sizes on the investment portfolio side, a reduction in per share public company costs and increased trading liquidity in the equity,” said Ted Goldthorpe, President and Chief Executive Officer of PTMN and Head of BC Partners Credit.

Keefe, Bruyette & Woods, A Stifel Company served as exclusive financial advisor to the Special Committee of GARS’ Board of Directors. Proskauer Rose LLP served as counsel to GARS and Eversheds Sutherland (US) LLP served as counsel to the Special Committee of GARS’ Board of Directors. Simpson Thacher & Bartlett LLP served as counsel to PTMN.

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