Capital Southwest Supports BRS & Co.’s Recapitalization of Shearwater Research

Rhea-AI Summary

Capital Southwest Corporation (CSWC) announced its backing of BRS & Co.'s majority recapitalization of Shearwater Research. This financing includes a revolving credit facility, first lien term loan, delayed draw term loan, and a minority equity co-investment, with Capital Southwest as the lead and sole administrative agent. Shearwater, known for its dive computers, aims to accelerate growth as dive travel resumes amid lifting travel restrictions. With net assets of approximately $313 million, Capital Southwest focuses on supporting middle-market businesses through flexible financing solutions.

Positive

• Capital Southwest leads financing for BRS & Co.'s recapitalization of Shearwater Research.
• Financing includes multiple instruments: revolving credit, first lien term loan, and equity co-investment.
• Capital Southwest's backing indicates confidence in Shearwater's growth potential as travel restrictions ease.

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• None.

DALLAS, May 20, 2021 (GLOBE NEWSWIRE) -- Capital Southwest Corporation (“Capital Southwest”) (Nasdaq: CSWC), an internally managed business development company focused on providing flexible financing solutions to support the acquisition and growth of middle market businesses, announced today that it backed BRS & Co.’s (“BRS”) majority recapitalization of Shearwater Research (“Shearwater” or the “Company”) with a revolving credit facility, first lien term loan, delayed draw term loan and a minority equity co-investment.  Capital Southwest led the financing and will act as the sole administrative agent on the credit facilities.

"We are thrilled to partner with BRS on its investment in Shearwater,” said Josh Weinstein, Senior Managing Director of Capital Southwest. “The Company has developed a strong reputation as one of the premier global providers of dive computers and related technologies.” Spencer Klein, Senior Vice President of Capital Southwest, said, “We’re excited to support BRS as they leverage their expertise in consumer products to help accelerate the Company’s growth and continue the development of new products. Shearwater is well-positioned to benefit from the resumption of dive trips as travel restrictions continue to subside worldwide.”

Founded in 2004 and headquartered near Vancouver, British Columbia, Shearwater designs and manufactures dive computers and rebreather electronics for technical and recreational diving. The Company specializes in designing simple, intuitive user interfaces, making Shearwater one of the most sought-after brands among diving enthusiasts, specialty dive shops, dealers, and rebreather OEMs. For additional information on Shearwater, please visit www.shearwater.com.

About Capital Southwest

Capital Southwest Corporation (Nasdaq: CSWC) is a Dallas, Texas-based, internally managed business development company, with approximately $313 million in net assets as of December 31, 2020. Capital Southwest is a middle market lending firm focused on supporting the acquisition and growth of middle market businesses with $5 to $25 million investments across the capital structure, including first lien, unitranche, second lien, subordinated debt and non-control equity co-investments. As a public company with a permanent capital base, Capital Southwest has the flexibility to be creative in its financing solutions and to invest to support the growth of its portfolio companies over long periods of time.

About BRS & Co.

Founded in 1995, BRS & Co., LLC is a New-York based private equity investment firm with combined capital invested of over $1.2 billion. BRS specializes in management buyouts and recapitalizations of high quality, lower middle market companies – with enterprise values of $25 to $250 million – in the consumer sector. Specific areas of the consumer sector in which BRS focus include specialty retail, restaurants, food and beverages, consumer products and services and specialty distribution. For additional information, please visit www.brs.com.

Forward-Looking Statements

This press release contains historical information and forward-looking statements with respect to the business and investments of Capital Southwest. Forward-looking statements are statements that are not historical statements and can often be identified by words such as "will," "believe," "expect" and similar expressions and variations or negatives of these words. These statements are based on management's current expectations, assumptions and beliefs. They are not guarantees of future results and are subject to numerous risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. These risks include risks related to: changes in the markets in which Capital Southwest invests; changes in the financial, capital, and lending markets; regulatory changes; tax treatment and general economic and business conditions; and uncertainties associated with the impact from the COVID-19 pandemic, including its impact on the global and U.S. capital markets and the global and U.S. economy, the length and duration of the COVID-19 outbreak in the United States as well as worldwide and the magnitude of the economic impact of that outbreak; the effect of the COVID-19 pandemic on our business prospects and the operational and financial performance of our portfolio companies, including our ability and their ability to achieve their respective objectives, and the effects of the disruptions caused by the COVID-19 pandemic on our ability to continue to effectively manage our business.

Investor Relations Contact:
Michael S. Sarner, Chief Financial Officer
214-884-3829

FAQ

What financing did Capital Southwest provide for Shearwater Research?

Capital Southwest provided a revolving credit facility, first lien term loan, delayed draw term loan, and a minority equity co-investment to support Shearwater Research's recapitalization.

What is the significance of the partnership between Capital Southwest and BRS & Co.?

The partnership signifies Capital Southwest's commitment to supporting the growth of Shearwater Research, leveraging BRS & Co.'s expertise in consumer products.

How might the easing of travel restrictions affect Shearwater Research?

Easing travel restrictions could lead to a resumption of dive trips, positively impacting Shearwater Research's sales and market growth.

What is the net asset value of Capital Southwest?

As of December 31, 2020, Capital Southwest reported net assets of approximately $313 million.

What market does Capital Southwest focus on?

Capital Southwest focuses on middle-market businesses, providing financing solutions ranging from $5 million to $25 million.