Great Elm Capital Corp. (“GECC”) Raises $12 Million of Equity at Net Asset Value

Rhea-AI Summary

Great Elm Capital Corp. (GECC) has raised $12 million through the issuance of approximately 1.0 million shares of common stock at a net asset value of $12.03 per share to Prosper Peak Holdings. The parent company, Great Elm Group (GEG), invested $3 million in Prosper Peak Holdings, aligning its interests with GECC shareholders.

This latest funding brings GECC's total non-dilutive equity raised this year to $38 million. CEO Matt Kaplan highlighted the company's growth, noting a nearly 80% increase in gross net asset value since March 2022. GEG's CEO, Jason Reese, emphasized the group's commitment to expanding its credit platform through this investment.

Positive

• Raised $12 million at net asset value, avoiding shareholder dilution.
• Total non-dilutive equity raised year-to-date is $38 million.
• Gross net asset value increased by nearly 80% since March 2022.
• Great Elm Group invested $3 million in Prosper Peak Holdings, aligning with shareholder interests.

Negative

• None.

Financial Analyst

Great Elm Capital Corp. (GECC) has successfully raised $12 million of equity at the current net asset value (NAV) of $12.03 per share. This is a significant move, considering the non-dilutive nature of the equity raised, protecting existing shareholders from dilution. The total gross net asset value has grown by nearly 80% since March 2022. This dramatic increase indicates effective management and strategic growth initiatives.

Retail investors should note that raising equity at NAV is typically favorable. It shows investor confidence in the company's current valuation and prospects. Furthermore, GECC's ability to raise $38 million of non-dilutive equity year-to-date reinforces their strong capital management strategies.

Great Elm Group’s $3 million investment in Prosper Peak Holdings (PPH) aligns their interests with existing shareholders, indicating commitment and confidence from the parent company. This could enhance shareholder value in the long run as the capital base expands, potentially leading to more robust returns.

Market Research Analyst

The involvement of Prosper Peak Holdings (PPH) and Great Elm Group, Inc. in this equity raise is particularly noteworthy. By channeling $3 million into PPH, Great Elm Group is strategically positioning itself within the ecosystem of its investment manager. Such investments often lead to enhanced synergies and operational efficiencies.

This strategic move could foster market confidence, implying that both internal and external stakeholders see substantial potential in GECC’s growth trajectory. For retail investors, this indicates a robust support network and further strategic alignment, potentially translating to more stable and predictable growth patterns in the future.

PALM BEACH GARDENS, Fla., June 24, 2024 (GLOBE NEWSWIRE) -- Great Elm Capital Corp. (the “Company” or “GECC”), (NASDAQ: GECC), a business development company, today announced it issued approximately 1.0 million shares of the Company’s common stock at a current net asset value of $12.03 per share, for an aggregate gross purchase price of $12 million, to Prosper Peak Holdings, LLC (“PPH”).

Great Elm Group, Inc. (“GEG”), the parent of the Company’s investment manager, made a $3 million investment in PPH, further aligning it with shareholders.

“We have raised $38 million of non-dilutive equity year-to-date, bolstering our efforts to expand the platform,” said Matt Kaplan, GECC’s Chief Executive Officer. “Our gross net asset value by dollars has grown by nearly 80% since management and the board were refreshed in March 2022, benefiting our shareholders as we leverage our infrastructure and build out our portfolio verticals.”

Jason Reese, GEG’s Chief Executive Officer, said, “GEG is committed to supporting and expanding its credit platform, anchored by GECC. We are excited to announce our participation in Prosper Peak, which will further grow GECC’s capital base.”   

About Great Elm Capital Corp.
GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses.

Cautionary Statement Regarding Forward-Looking Statements
Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are: conditions in the credit markets, rising interest rates, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

This press release does not constitute an offer of any securities for sale.

Media & Investor Contact:
Investor Relations
investorrelations@greatelmcap.com

Source: Great Elm Capital Corp.

FAQ

How much equity did GECC raise in their recent funding?

GECC raised $12 million in their recent funding.

What was the net asset value per share for GECC's latest equity issuance?

The net asset value per share for GECC's latest equity issuance was $12.03.

How many shares did GECC issue for the recent $12 million equity raise?

GECC issued approximately 1.0 million shares for the recent $12 million equity raise.

Who invested in GECC's recent $12 million equity raise?

Prosper Peak Holdings invested in GECC's recent $12 million equity raise.

How much did Great Elm Group invest in Prosper Peak Holdings?

Great Elm Group invested $3 million in Prosper Peak Holdings.

What is the total amount of non-dilutive equity GECC has raised this year?

GECC has raised a total of $38 million in non-dilutive equity this year.

By how much has GECC's gross net asset value increased since March 2022?

GECC's gross net asset value has increased by nearly 80% since March 2022.