Crescent Capital BDC announced the closing of the previously announced merger with First Eagle Alternative Capital BDC. The combined company, which will remain externally managed by Crescent Cap Advisors, LLC, a subsidiary of Crescent Capital Group, has more than $1.6 billion of assets on a pro forma basis based on December 31, 2022 financial information.
Based on the merger exchange ratio, First Eagle BDC stockholders will receive the following, subject to previously disclosed election mechanics, in exchange for each share of First Eagle BDC common stock held at the effective time of the merger: (i) $0.29 of cash from Crescent BDC, (ii) 0.20635 of a share of Crescent BDC common stock (with cash payable in lieu of fractional shares), and (iii) $1.17 of cash as transaction support provided by Crescent Cap Advisors, LLC. The exchange ratio was determined based on the closing net asset value (NAV) per share of $19.91 and $4.40 for Crescent BDC and First Eagle BDC, respectively, as of March 7, 2023. Crescent BDC’s net asset value per share includes approximately $0.35 of accrued net investment income as of March 7, 2023. Crescent BDC issued approximately 6,174,383 shares of Crescent BDC common stock to First Eagle BDC stockholders in connection with the merger, resulting in legacy Crescent BDC stockholders and former First Eagle BDC stockholders owning approximately 83% and 17% of the combined company, respectively, at closing.
Jason Breaux, President and Chief Executive Officer of Crescent BDC, said, “We are excited to close the acquisition of First Eagle BDC, as we expect this transaction will provide both strategic and financial benefits to our new and existing stockholders. In addition to being accretive to core earnings, this merger increases our market presence, improves our access to capital, and enhances asset diversification, while staying true to our core strategy of maintaining a high quality, senior secured, first lien-focused portfolio.”
Wells Fargo Securities served as sole financial advisor and Kirkland & Ellis LLP served as legal counsel to Crescent BDC. Keefe, Bruyette and Woods (KBW), A Stifel Company, served as financial advisor and Simpson Thacher & Bartlett LLP served as legal counsel to First Eagle BDC.
Share Purchase Program
In addition, as previously announced, in connection with the closing of the merger with First Eagle BDC, Sun Life Financial Inc. (“Sun Life”), which owns a majority interest in Crescent, has committed to provide secondary-market support and will purchase up to $20.0 million of the combined company’s common stock via a share purchase program (the “Sun Life purchase program”). Purchases of Crescent BDC common stock pursuant to the Sun Life purchase program will be subject to certain conditions as set forth in the program and will be conducted in accordance with Rules 10b5-1 and 10b-18 under the Securities and Exchange Act of 1934, as amended, and other applicable securities laws and regulations that set certain restrictions on the method, timing, price, and volume of stock purchases.