Barings BDC, Inc. Completes Merger With MVC Capital, Inc.
Barings BDC, Inc. (NYSE: BBDC) has successfully completed its merger with MVC Capital, Inc. The combined entity will manage over $1.5 billion in assets. MVC Capital shareholders will receive 0.9790836 shares of Barings BDC along with approximately $0.39492 in cash for each share held. Post-merger, Barings LLC has reduced its management fee from 1.375% to 1.250%. Additionally, Barings BDC will initiate a $15 million share repurchase program. The merger will also lead to the redemption of $95 million in MVC Capital's senior notes due 2022.
- Combined assets expected to exceed $1.5 billion post-merger.
- Reduction of annual management fee from 1.375% to 1.250%.
- Initiation of a $15 million share repurchase program.
- Redemption of $95 million MVC senior notes could impact liquidity.
- MVC Notes delisting from NYSE may affect liquidity for existing noteholders.
CHARLOTTE, N.C., Dec. 23, 2020 /PRNewswire/ -- Barings BDC, Inc. (NYSE: BBDC) ("Barings BDC") announced today the closing of the previously announced merger with MVC Capital, Inc. ("MVC Capital"). The combined company, which will remain externally managed by Barings LLC, is expected to have more than
As a result of the merger, MVC Capital shareholders will receive the following in exchange for each share of MVC common stock held at the effective time of the merger: (i) 0.9790836 of a share of Barings BDC common stock (which gives effect to the Euro-dollar exchange rate adjustment mechanism in the merger agreement), and (ii) approximately
Amended and Restated Investment Advisory Agreement and Credit Support Agreement
In addition, following the closing of the merger, Barings LLC and Barings BDC entered into an amended and restated investment advisory agreement that, among other things, (i) reduced the annual base management fee payable to Barings LLC from
Barings LLC also entered into a credit support agreement with Barings BDC, for the benefit of the combined company, to protect against net cumulative unrealized and realized losses of up to
Share Repurchase Program
In connection with the closing of the merger, Barings BDC's board of directors affirmed Barings BDC's commitment to open-market purchases of shares of Barings BDC's common stock in an aggregate amount of up to
Appointment of New Independent Director
Effective immediately after the closing of the Merger, Barings BDC increased the size of its board of directors from seven directors to eight directors and appointed Robert Knapp, a former director of MVC Capital, to serve as an independent member of the board of directors. Mr. Knapp has also been appointed to serve on each standing committee of the board of directors.
Redemption of Notes
In connection with the closing of the merger, MVC Capital notified U.S. Bank National Association ("U.S. Bank"), the trustee for MVC Capital's
The MVC Notes have been delisted from the New York Stock Exchange ("NYSE"), and trading in the MVC Notes on the NYSE is expected to be suspended pre-market open on December 24, 2020. After the delisting, holders of the MVC Notes will continue to conduct business with and receive interest payments through the trustee, U.S. Bank. Barings BDC does not intend to arrange for listing and/or registration of the MVC Notes on another national securities exchange or for quotation on another quotation medium.
Forward-Looking Statements
This press release contains "forward-looking statements," which are statements other than statements of historical facts, are not guarantees of future performance or results of Barings BDC, including the combined company following the Barings BDC's acquisition of MVC Capital (the "Merger"), and involve a number of risks and uncertainties. Such forward-looking statements may include statements preceded by, followed by or that otherwise include the words "may," "might," "will," "intend," "should," "could," "can," "would," "expect," "believe," "estimate," "anticipate," "predict," "potential," "plan" or similar words. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in filings made by Barings BDC with the Securities and Exchange Commission ("SEC"). Certain factors could cause actual results and conditions to differ materially from those projected, including, but not limited to, the uncertainties associated with (i) the expected synergies and savings associated with the Merger, (ii) the expected elimination of certain expenses and costs due to the Merger, (iii) the operating results of Barings BDC or its portfolio companies subsequent to the Merger, (iv) fluctuations in the market price of Barings BDC's common stock, and (v) the Merger's effect on the relationships of Barings BDC with its investors, portfolio companies, lenders and service providers. You should not place undue reliance on such forward-looking statements, which are based upon Barings BDC management's current views and assumptions regarding future events and operating performance, and speak only as of the date any such statement is made.
More information on these risks and other potential factors that could affect Barings BDC's financial results, including important factors that could cause actual results to differ materially from plans, estimates or expectations included herein is included in Barings BDC's filings with the SEC, including in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of Barings BDC's most recently filed annual report on Form 10-K, as well as in subsequent filings, including Barings BDC's quarterly reports on Form 10-Q. In addition, there is no assurance that Barings BDC or any of its affiliates will purchase additional shares of Barings BDC at any specific discount levels or in any specific amounts. There is no assurance that the market price of Barings BDC's shares, either absolutely or relative to net asset value, will increase as a result of any share repurchases, or that any repurchase plan will enhance shareholder value over the long term. Barings BDC undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this communication.
About Barings BDC
Barings BDC, Inc. (NYSE: BBDC) is a publicly traded, externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. Barings BDC seeks to invest primarily in senior secured loans to private U.S. middle market companies that operate across a wide range of industries. Barings BDC's investment activities are managed by its investment adviser, Barings LLC, a leading global asset manager based in Charlotte, NC with over
About Barings LLC
Barings is a
*Assets under management as of September 30, 2020
Barings BDC Contacts
Media Contact:
Cheryl Krauss, Media Relations, Barings, 980-417-5858, cheryl.krauss@barings.com
Investor Relations:
BDCinvestorrelations@barings.com, 888-401-1088
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SOURCE Barings BDC, Inc.
FAQ
What is the impact of the Barings BDC and MVC Capital merger on shareholders?
What will MVC Capital shareholders receive from the merger?
What changes occurred in Barings BDC's management fees after the merger?
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