Bcp Investment Corporation · NASDAQ:BCIC
Bcp Investment — KCAP Financial — Merger or Acquisition (January 2019)
15 slides from Bcp Investment's merger presentation, Jan 2, 2019
Slide 1: BCP Credit Presentation to KCAP Investors
BCP Credit January 2, 2019 Presentation to KCAP Investors
Slide 2: Important Information: Forward-Looking Statements
BC Partners I 2 Important Information Forward - Looking Statements Statements contained in this Presentation (including those relating to the proposed transaction, the impact to KCAP Financial , I nc. (“KCAP” or the “Company”) and its s as a result of the proposed transaction and the portfolio strat
Slide 3: Executive Summary
BC Partners I 3 ▪ On December 17, 2018, KCAP Financial, Inc. (“KCAP” or the “Company”) entered into a Stock Purchase and Transaction with BC Partners Advisors L.P. (“BC” or “BC Partners”) that will result in an affiliate controlled by BCP Credit (the “Manager”) becoming the external manager of KCAP.
Slide 4: Summary of Key Transaction Terms
BC Partners I 4 Summary of Key Transaction Terms Management Agreement ▪ BCP Credit to become the Investment Manager of KCAP through a new Investment Management Agreement Payment to Stockholders ▪ Stockholders will receive a direct cash payment from BC Partners or its affiliate – Cash payment expecte
Slide 5: Compelling Transaction for KCAP Stockholders
BC Partners I 5 Compelling Transaction for KCAP Stockholders Fully Integrated Platform with BC Partners ▪ Stockholders will be able to access the full range of resources of a leading asset management firm – Partnership with a large and growing credit business will enhance sourcing capabilities and p
Slide 6: BC Partners Lending Differentiators
BC Partners I 6 BC Partners Lending Differentiators ▪ While the increasing popularity of direct lending has gathered many headlines as of late, we believe BC Partners Lending Plat for m is differentiated on five key aspects Views expressed are those of BCP Credit. 1 Anticipated portfolio constructio
Slide 7: BC Partners and BCP Credit
BC Partners I 7 BC Partners and BCP Credit BC Partners: A Leading Buyout Firm Investing across Europe and North America 105 INVESTMENTS 1 €20 BN INVESTED 63 PE INVESTMENT PROFESSIONALS ACROSS EUROPE AND NEW YORK 30 YEAR INVESTMENT HISTORY 7 REALISED FUNDS 38% GROSS IRR 2 1 Includes VetPartners signe
Slide 8: BCP Credit – Integration with Private Equity Platform
BC Partners I 8 BCP Credit – Integration with Private Equity Platform Sourcing Opportunities PE Deal flow & Portfolio ▪ Industry insights ▪ Access to senior operational experts supports ability to own and add value to portfolio companies ▪ Proactive sub - sector company targeting ▪ BCP cost synergy
Slide 9: A Flexible, Differentiated Strategy
BCP Credit I 9 0% 20% 40% 60% 80% 100% 120% -10 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 Lower Middle - Market Corporate EBITDA (in Millions) Upper Middle - Market Non - Sponsored Sponsor - backed BC Partners Lending A Flexible, Differentiated Strategy Source: Company
Slide 10: A Flexible, Differentiated Strategy: Smaller Capital Structures
BCP Credit I 10 A Flexible, Differentiated Strategy: Smaller Capital Structures The Effects of Competition ▪ Increased competition in the upper middle - market has led to BDCs offering borrowers concessions on pricing and/or covenants in order to win deals ▪ As EBITDA increases, so too does leverage
Slide 11: A Flexible, Differentiated Strategy: Core/Core Plus Approach
BCP Credit I 11 A Flexible, Differentiated Strategy: Core/Core Plus Approach Non - Sponsor Capabilities ▪ A large majority of direct lending managers focus exclusively on sponsor - backed opportunities, while the market for non - sponsored loans remains robust and offers a pick up in yield ▪ Unlike
Slide 12: Appendix
v Appendix
Slide 13: Middle-Market Lending Remains An Attractive Opportunity
BC Partners I 13 Middle - Market Lending Remains An Attractive Opportunity The middle - market offers attractive risk - adjusted returns vs. broadly syndicated loans ▪ The spread differential between middle - market and large corporate loan spreads is at record highs ▪ Upfront fees on average are ri
Slide 14: Continued Demand for Middle-Market Financing
BC Partners I 14 Continued Demand for Middle - Market Financing Maturity Wall Demand for middle - market financing remains robust despite the entrance of new participants in the lending space ▪ A portion of loan volume has historically been driven by the investment activity of private equity sponsor
Slide 15: Explanatory Notes
BCP Credit I 15 Explanatory Notes Unless otherwise indicated, all internal rates of return (“IRR”) and multiples of invested capital (“MOIC”) are presented on a “ gross” basis (i.e., they do not reflect ( i ) the management profit share, (ii) “carried interest”, and (iii) other fees and expenses tha
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