Business
Great Elm Capital Group, Inc. Announces Financing In The Form Of A Preferred Equity Investment From Affiliate of JPMorgan Chase & Co.
Concurrent with Expected Closing, Company to Host Conference Call to Discuss at 8:30 AM on December 29, 2020 WALTHAM, Mass., Dec. 21, 2020 (GLOBE NEWSWIRE) --
About this update from Great Elm Group, Inc.
[{"type":"text","content":"Concurrent with Expected Closing, Company to Host Conference Call to Discuss at 8:30 AM on December 29, 2020\nWALTHAM, Mass., Dec. 21, 2020 (GLOBE NEWSWIRE) -- Great Elm Capital Group, Inc. (NASDAQ: GEC, “Great Elm”) announced today a financing transaction with J.P. Morgan Broker-Dealer Holdings Inc. (“JPM”). Highlights of the Transaction JPM will provide $37.7 million of financingProceeds Will be Used to Refinance Great Elm’s Durable Medical Equipment (“DME”) Business, and to provide DME with Growth CapitalIncreases Cash at Holding Company by $5.0 millionChanges Name to Great Elm Group, Inc. and completes internal reorganization as part of the transactionNew Ticker Symbol will be “GEG”Transaction expected to be completed by December 29, 2020 Management CommentaryPeter Reed, Great Elm’s Chief Executive Officer, stated, “This financing transaction with JPM enables the firm to accelerate the growth of our existing businesses and at the same time, provides incremental capital to acquire additional businesses. The transaction will immediately lower the cost of capital for our DME business and provide growth capital to take advantage of organic growth and acquisition opportunities. Longer-term, our goal is to strengthen the relationship with JPM and seek additional means of enhancing shareholder value.” Mr. Reed continued, “As part of this transaction, we are creating a new parent company and executing a ticker change which will distinguish Great Elm Group from our affiliated publicly-traded BDC. Our rebranding underscores the importance and opportunity associated with the recapitalization.” Details of the TransactionAs a part of this transaction, Great Elm will create a new parent company, Great Elm Group (NASDAQ: GEG), and formally change its name and ticker symbol. Existing GEC stockholders will have their shares of GEC exchanged in a 1:1 ratio for shares of GEG. GEC shares are expected to cease trading on the NASDAQ as of the close of the stock market on December 28, 2020. Shares of GEG are expected to begin trading prior to the opening of the stock market on December 29, 2020. As a result of this transaction, GEG will own 100% of the capital stock of GEC, which will be renamed Forest Investments, Inc (“Forest”). Upon completion of this transaction, Forest will issue to JPM $35.0 million of 9.0% preferred stock with a maturity da...