Bcp Investment Corporation · NASDAQ:BCIC
Bcp Investment — Portman Ridge Finance — Merger or Acquisition (December 2020)
21 slides from Bcp Investment's merger presentation, Dec 24, 2020
Slide 1: Harvest Capital Credit Corp. to Merge Into Portman Ridge
Harvest Capital Credit Corp. to Merge Into Portman Ridge Investor Presentation December 24, 2020
Slide 2: Important Information
Important Information Forward-Looking Statements This Presentation may contain forward-looking statements that involve substantial risks and uncertainties, including statements regarding the completion of the transaction between Harvest Capital Credit Corporation (“HCAP”) and Portman Ridge Finance C
Slide 3: Transaction Overview
Transaction Overview ▪ Harvest Capital Credit Corporation (NASDAQ: HCAP) and Portman Ridge Finance Corporation (Nasdaq: PTMN) (the “Company” or “PTMN”) announced today that they have entered into a definitive agreement under which HCAP will merge with and into PTMN, a business development company ma
Slide 4: Key Transaction Highlights
Key Transaction Highlights Management ▪ Sierra Crest will continue to be the investment manager of the combined company Agreement through its existing investment advisory agreement. ▪ HCAP stockholders will receive a direct cash payment from Sierra Crest. – The cash payment will be $2.15 million, or
Slide 5: Compelling Transaction for PTMN & HCAP Stockholders
Compelling Transaction for PTMN & HCAP Stockholders ▪ The transaction is expected to be accretive to NII per share, as well as continuing to execute on PTMN’s consolidation plan discussed at the outset of the KCAP externalization transaction. Economic – The combined portfolio can withstand meaningfu
Slide 6: Illustrative Transaction Analysis for HCAP Stockholders
Illustrative Transaction Analysis for HCAP Stockholders(1) Transaction Value At PTMN Current Stock At 9/30/20 PTMN (2) (in millions, except per share) Price Pro Forma NAV PTMN Stock Price per Share $1.80 $2.76 Exchange Ratio (3) 2.503x 2.503x HCAP Shares Acquired / Outstanding 6.0 6.0 Stock Consider
Slide 7: About Portman Ridge
About Portman Ridge ▪ Focus on direct origination of senior secured debt investments to the middle market ▪ Experienced, strategic management team centered on execution and delivering NII growth Portman Ridge (NASDAQ: PTMN) ▪ Three strategic transactions closed since 2019 with portfolio repositionin
Slide 8: Achieving Scale
Achieving Scale ▪ Portman Ridge has quickly achieved scale since taking over in April 2019, closing two strategic transactions since then ▪ Following each transaction, Portman Ridge promptly rotated portions of the acquired portfolios into higher quality assets with higher risk-adjusted spreads and
Slide 9: Appendix
RIDGE Appendix
Slide 10: BC Partners Credit Platform
BC Partners Credit Platform BC PARTNERS CREDIT: A FULL CREDIT CYCLE INVESTMENT PLATFORM 2017 18 17 c. $4.2bn1 FOUNDED PLATFORM INVESTMENT PROFESSIONALS AVG. YEARS OF EXPERIENCE OF IN AUM ACROSS SENIOR INVESTMENT TEAM CREDIT PLATFORM Yield: $3.3bn in AUM Opportunistic: $950m in AUM ▪ Direct lending f
Slide 11: BC Partners Differentiators
BC Partners Differentiators While the increasing popularity of direct lending has gathered many headlines as of late, we believe the BC Partners Credit platform is differentiated on four key aspects Ability to serve as a strategic lender by sharing best practices Stand-alone credit platforms cannot
Slide 12: BC Partners Lending Advantages
BC Partners Lending Advantages BC PLATFORM EXPERIENCED INVESTMENT TEAM ▪ Access to deal flow and sourcing through fully integrated model ▪ Ted Goldthorpe served as President of Apollo Investment Corporation (one of the largest publicly traded U.S. BDCs) and CIO of the sub-advisor to CION ▪ BCP Opera
Slide 13: Integration with BC Partners Platform
Integration with BC Partners Platform Full integration with the BC Partners platform provides an edge at every stage of the investment process BENEFITS OF BC PARTNERS PLATFORM RESOURCES INCLUDE BENEFITS OF BC PARTNERS PLATFORM RESOURCES INCLUDE: Operating advisor and external network 150+ EMPLOYEES
Slide 14: BCP Approach to Credit Investing
BCP Approach to Credit Investing BCP Credit has been formed to take advantage of attractive risk-adjusted return opportunities and dislocations in the U.S. and European credit markets ▪ Target opportunities across the credit spectrum where other capital is retrenching due to limited duration and reg
Slide 15: Financial Highlights
Financial Highlights ($ in ‘000s) Q3 2019* Q4 2019 Q1 2020 Q2 2020 Q3 2020* Total investment income $7,076 $6,705 $7,754 $7,314 $7,787 Management fees 1,026 1,077 1,012 1,008 1,044 Performance-based incentive fees -- -- 102 455 572 Interest and amortization of debt issuance costs 2,281 2,197 2,350 2
Slide 16: Net Asset Value Rollforward
Net Asset Value Rollforward ($ in ‘000s) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 NAV, Beginning of Period $139,178 $132,723 $152,199 $120,370 $120,714 (1) Realized Gains (Losses) from Investments (1,176) (1,326) (1,048) (882) (1,890) (1) Unrealized Gains (Losses) (5,317) (2,649) (30,924) 1,565 7,512
Slide 17: Portfolio Composition
(1) Portfolio Composition Investment Portfolio ($ in ‘000s) Q4 2019 Q1 2020 Q2 2020 Q3 2020 First Lien Debt $87,522 $105,379 $117,265 $114,022 Second Lien Debt 95,188 83,926 78,366 79,851 First Lien Last Out 500 8,050 7,619 7,583 Equity Securities 9,864 8,046 9,538 9,703 CLO Fund Securities 31,968 1
Slide 18: Portfolio Trends
(1) Portfolio Trends ($ in ‘000s) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Portfolio Sourcing (at Fair Value): Sierra Crest Investment Management 104,223 133,315 149,246 148,289 Legacy KCAP 133,686 106,241 100,653 104,023 Legacy OHAI 35,781 30,303 28,757 26,547 Portfolio Summary: Total portfolio, at fair val
Slide 19: Credit Quality
Credit Quality As shown below, the percentage of non-accrual assets (both on a cost and fair value basis) as a percentage of total has been decreasing on a quarter over quarter basis ($ in ‘000s) Q4 2019 Q1 2020 Q2 2020 Q3 2020 Investments on Non-Accrual Status Number of Non-Accrual Investments 7 9
Slide 20: Corporate Leverage & Liquidity
Corporate Leverage & Liquidity Cash and Short-term Investments ▪ Unrestricted cash and short-term investments totaled $10.9 million at September 30, 2020 ▪ Restricted cash of $4.9 million at September 30, 2020 represents cash held in our revolving credit facility Debt Summary ▪ Balanced mix between
Slide 21: Corporate Information
Corporate Information Board of Directors Senior Management Research Coverage Ted Goldthorpe Ted Goldthorpe Ryan Lynch Chairman of the Board Chief Executive Officer Keefe Bruyette & Woods Graeme Dell Edward “Ted” Gilpin Chris Nolan Director Chief Financial Officer Ladenburg Thalmann Robert Warshauer
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