Phenixfin Corporation · NASDAQ:PFX
Phenixfin — Sierra Income — Merger or Acquisition (July 2019)
16 slides from Phenixfin's merger presentation, Jul 29, 2019
Slide 1: Investor Presentation: Merger Update
Investor Presentation Sierra Income Corporation, Medley Capital Corporation and Medley Management Inc. Merger Update July 29, 2019
Slide 2: Important Notices
Important Notices This presentation contains “forward-looking” statements, including statements regarding the proposed transactions. Such forward-looking statements reflect current views with respect to future events and financial performance, and each of Sierra Income Corporation (“Sierra”), Medley
Slide 3: Important Notices: Additional Information and Where to Find It
Important Notices Additional Information and Where to Find It In connection with the proposed transactions, Sierra intends to file with the SEC and mail to its stockholders an amendment to the Registration Statement on Form N-14 that will include a proxy statement and that also will constitute a pro
Slide 4: Key Transaction Highlights
Key Transaction Highlights The combination of Sierra Income Corp. (“Sierra”), Medley Capital Corp. (“MCC”) and Medley Management Inc. (“MDLY”) will create a leading, publicly traded internally managed BDC Expected to create the 3rd largest internally managed and 13th largest publicly traded business
Slide 5: Transaction Results in Increased Scale
Transaction Results in Increased Scale Transaction is expected to create the 3rd largest internally managed and the 13th largest publicly traded BDC Manager Assets Market Cap Price / NAV 2019E NII / Price 2019E NII / NAV Ares Capital Corporation $ 13,962 $ 7,642 1.04 x 10.0 % 10.4 % FS KKR Capital C
Slide 6: Transaction Summary
Transaction Summary • Combination of Sierra, MCC and MDLY through two transactions with Sierra as the surviving entity:1 Structure − Merger of MCC into Sierra − Acquisition of MDLY by Sierra; MDLY will operate as a subsidiary of Sierra • Each MCC share will be converted into 0.66x to 0.68x shares of
Slide 7: Illustrative Pro Forma Structure
Illustrative Pro Forma Structure Existing Structure Pro-Forma SIC MDLY Sierra Unitholders (Ticker: TBD) (NYSE: MDLY) Medley Sierra MCC MDLY LLC Portfolio Portfolio (NYSE: MDLY)1 Advisory Contract Medley Other LLC MCC SIC Advisory Advisors Advisors Entities Advisory Contract Advisory Contract Advisor
Slide 8: Review of Independent Decision Framework
Review of Independent Decision Framework Independent Special Committees drove comprehensive and independent decision making processes at Sierra, MCC and MDLY Three Special Committees were formed and consisted solely of independent directors Three independent financial advisors were engaged by
Slide 9: Independent Special Committees and Advisors
Independent Special Committees and Advisors Three Special Committees, comprised solely of independent directors, have been assisted by their respective financial and legal advisors Sierra MCC MDLY • Stephen R. Byers (Chair) • David A. Lorber (Chair) • Jeffrey T. Leeds (Chair) Special Committees • Ol
Slide 10: Key Corporate Governance Highlights
Key Corporate Governance Highlights The Combined Company will feature a strong corporate governance structure and greater management alignment with shareholders Board composition consistent with industry best practices - greater independence (4 out of 5 directors will be independent and an indepe
Slide 11: Sierra Pro-Forma Portfolio Summary
Sierra Pro-Forma Portfolio Summary Investment Type Floating vs Fixed Rate1 4% 5% 13% First Lien 10% Second Lien Floating Equity Fixed Unsecured 73% 95% Industry Sponsor / Non-Sponsor Services: Business Healthcare & Pharmaceuticals 16% 16% High Tech Industries 29% Construction & Building 10% Aerospac
Slide 12: Combined Debt Maturity Profile
Combined Debt Maturity Profile Liabilities are well diversified with a staggered debt maturity profile with estimated regulatory leverage of 0.60x1 $300.0 $250.0 $200.0 Sierra - ING USD in Millions Revolver (incremental) $59.9 $150.0 Sierra - ING $100.0 Revolver $88.1 MCC - 2021 Sierra- Alpine MCC -
Slide 13: Medley Platform
Medley Platform 13
Slide 14: Medley Platform Overview
Medley Platform Overview Diversified alternative asset manager with approximately $4.7 billion of assets under management and synergies between business units (deal flow, ideas, relationships, experience) Direct Lending • Lending solutions for private, Corporate Credit middle market companies in the
Slide 15: 2015 Investment Strategy Shift Overview
2015 Investment Strategy Shift Overview Beginning in 2015, the Medley lending platform shifted its focus to first lien loans provided to larger, sponsor backed borrowers • Results - Across Medley, new investments post Q2 20151 have produced an IRR of 9.5% (9.0% for the Combined Company2,3) - New inv
Slide 16: Summary
Summary The combination of Sierra, MCC and MDLY expected to create a leading, publicly-traded internally managed BDC Expected to create the 3rd largest internally managed and 13th largest publicly traded BDC1 1 Creates a single, larger, diversified balance sheet 2 + Potential to increase share tradi