Solar Capital (SLRC) to Acquire Crystal Capital Financial in $275M Deal
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Solar Capital Ltd. (Nasdaq: SLRC) has entered into a definitive agreement, dated December 17, 2012, with SSP Energy Ltd., Quartz Managers LLC and Quantum Strategic Partners Ltd. to acquire Crystal Capital Financial Holdings LLC (“Crystal Financial”), a commercial finance company focused on providing asset-based and other secured financing solutions. Crystal Financial’s management team, including while at prior businesses, has underwritten and closed more than $20 billion of transactions for its clients since 1993.
Solar Capital expects to invest approximately $275 million to effect the acquisition. The current management team of Crystal Financial has committed to lead Crystal Financial going forward and will also make a meaningful investment as part of the transaction. Solar Capital expects that its acquisition of Crystal Financial will be immediately accretive to net investment income.
Crystal Financial currently oversees a directly originated and underwritten, diversified portfolio of 23 loans having a total par value of approximately $400 million at November 30, 2012. Solar Capital believes that Crystal Financial’s business of assisting issuers with unique financing needs offers the potential for attractive returns irrespective of economic or debt capital market conditions.
Post-closing, Solar Capital expects Crystal Financial to be treated as a pass-through entity for tax purposes and to distribute a substantial portion of its current earnings to Solar Capital on a quarterly basis. Solar Capital expects its investment in Crystal Financial to generate a cash yield consistent with other assets in its portfolio.
The acquisition is subject to customary closing conditions, including the expiration of the applicable waiting period under the Hart Scott Rodino Act, and is expected to close prior to year end. Deutsche Bank Securities Inc. acted as financial advisor to Crystal Financial for the transaction.
Solar Capital expects to invest approximately $275 million to effect the acquisition. The current management team of Crystal Financial has committed to lead Crystal Financial going forward and will also make a meaningful investment as part of the transaction. Solar Capital expects that its acquisition of Crystal Financial will be immediately accretive to net investment income.
Crystal Financial currently oversees a directly originated and underwritten, diversified portfolio of 23 loans having a total par value of approximately $400 million at November 30, 2012. Solar Capital believes that Crystal Financial’s business of assisting issuers with unique financing needs offers the potential for attractive returns irrespective of economic or debt capital market conditions.
Post-closing, Solar Capital expects Crystal Financial to be treated as a pass-through entity for tax purposes and to distribute a substantial portion of its current earnings to Solar Capital on a quarterly basis. Solar Capital expects its investment in Crystal Financial to generate a cash yield consistent with other assets in its portfolio.
The acquisition is subject to customary closing conditions, including the expiration of the applicable waiting period under the Hart Scott Rodino Act, and is expected to close prior to year end. Deutsche Bank Securities Inc. acted as financial advisor to Crystal Financial for the transaction.
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