Boards of Directors of Portman Ridge Finance Corporation and Logan Ridge Finance Corporation Form Special Committees to Continue Evaluating Potential Business Combination

Rhea-AI Summary

Logan Ridge Finance (LRFC) and Portman Ridge Finance (PTMN) have announced the formation of special committees of independent directors to evaluate their potential business combination. Both companies' boards have established these committees to assess various merger scenarios, including exchange ratios different from NAV-for-NAV, such as relative market price or fixed exchange ratios.

The special committees have retained prominent financial and legal advisors: Keefe, Bruyette & Woods, Inc. and Stradley Ronon Stevens & Young, LLP for Portman Ridge, while Logan Ridge has engaged Houlihan Lokey, Inc. and Skadden, Arps, Slate, Meagher & Flom LLP. The companies note that there is no guarantee the business combination will be approved or completed.

Positive

• Formation of special committees indicates progress in merger discussions
• Engagement of top-tier financial and legal advisors suggests serious consideration of the deal

Negative

• Uncertainty about deal completion as explicitly stated in PR
• Potential deviation from NAV-for-NAV exchange ratio could impact shareholder value

Insights

Financial Analyst

The formation of special committees and engagement of prestigious financial advisors (KBW and Houlihan Lokey) signals serious progression in merger discussions between these BDCs. This potential combination could create significant value through economies of scale, improved cost structure and enhanced portfolio diversification. The notable shift from a NAV-for-NAV exchange ratio consideration to potentially market price or fixed ratio suggests careful attention to shareholder interests and current market dynamics. For Logan Ridge, with its smaller $66.3M market cap, a merger with Portman Ridge could provide enhanced liquidity and market presence. However, the final exchange ratio will be important in determining the deal's attractiveness to shareholders. The involvement of top-tier legal counsel (Skadden Arps and Stradley Ronon) indicates complex negotiations ahead.

Legal Expert

The establishment of independent special committees demonstrates strong corporate governance and compliance with fiduciary duties. This structure helps mitigate potential conflicts of interest and ensures fair consideration of minority shareholder interests. The engagement of elite law firms - Skadden Arps and Stradley Ronon - suggests complex regulatory considerations, particularly regarding SEC compliance and shareholder rights. The careful language around disclosure obligations ("do not intend to disclose further developments") aligns with securities law requirements while maintaining negotiation confidentiality. The exploration of various exchange ratio structures beyond NAV-for-NAV indicates thorough due diligence and consideration of multiple deal structures to optimize shareholder value.

NEW YORK, Dec. 12, 2024 (GLOBE NEWSWIRE) -- Portman Ridge Finance Corporation (Nasdaq: PTMN) (“Portman Ridge”) and Logan Ridge Finance Corporation (Nasdaq: LRFC) (“Logan Ridge”) announced today that their boards of directors have established special committees of independent directors to more fully evaluate the potential business combination of the two companies that was previously disclosed in their respective Form 10-Q filings with the Securities and Exchange Commission (the “SEC”), which may result in the use of an exchange ratio other than NAV-for-NAV (including but not limited to relative market price or a fixed exchange ratio) in connection therewith.

The special committee of Portman Ridge’s board of directors has retained Keefe, Bruyette & Woods, Inc. as financial advisor and Stradley Ronon Stevens & Young, LLP as legal counsel. The special committee of Logan Ridge’s board of directors has retained Houlihan Lokey, Inc. as financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel.

There can be no assurance that Portman Ridge and Logan Ridge will pursue the potential business combination, or that the potential business combination will be approved or consummated. Portman Ridge and Logan Ridge do not intend to disclose further developments regarding this matter unless and until further disclosure is determined to be appropriate or necessary.

About Portman Ridge Finance Corporation

Portman Ridge Finance Corporation (Nasdaq: PTMN) is a publicly traded, externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Portman Ridge’s middle market investment business originates, structures, finances and manages a portfolio of term loans, mezzanine investments and selected equity securities in middle market companies. Portman Ridge’s investment activities are managed by its investment adviser, Sierra Crest Investment Management LLC, an affiliate of BC Partners Advisors, L.P.

Portman Ridge’s filings with the SEC, earnings releases, press releases and other financial, operational and governance information are available on Portman Ridge’s website at https://www.portmanridge.com. 

About Logan Ridge Finance Corporation

Logan Ridge Finance Corporation (Nasdaq: LRFC) is a publicly traded, externally managed investment company that has elected to be regulated as a business development company under the Investment Company Act of 1940. Logan Ridge invests primarily in first lien loans and, to a lesser extent, second lien loans and equity securities issued by lower middle market companies. Logan Ridge Finance Corporation is externally managed by Mount Logan Management, LLC, a wholly owned subsidiary of Mount Logan Capital Inc.

Logan Ridge’s filings with the SEC, earnings releases, press releases and other financial, operational and governance information are available on Logan Ridge’s website at https://www.loganridgefinance.com.

About BC Partners Advisors L.P. and BC Partners Credit

BC Partners Advisors L.P. (“BC Partners”) is a leading international investment firm in private equity, private credit and real estate strategies. Established in 1986, BC Partners has played an active role in developing the European buyout market for three decades. Today, BC Partners executives operate across markets as an integrated team through the firm’s offices in North America and Europe. For more information, please visit https://www.bcpartners.com/.

BC Partners Credit was launched in February 2017 and has pursued a strategy focused on identifying attractive credit opportunities in any market environment and across sectors, leveraging the deal sourcing and infrastructure made available from BC Partners.

Cautionary Statement Regarding Forward-Looking Statements

This press release may contain forward-looking statements. The matters discussed in this press release, as well as in future oral and written statements by management of Portman Ridge or Logan Ridge, that are forward-looking statements are based on current management expectations that involve substantial risks and uncertainties which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements.

Forward-looking statements relate to future events or our future financial performance and include, but are not limited to, projected financial performance, expected development of the business, plans and expectations about future investments and the future liquidity of Portman Ridge or Logan Ridge. Forward-looking statements are generally identified by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “outlook”, “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. Forward-looking statements are based upon current plans, estimates and expectations that are subject to risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements.

In light of these uncertainties, the inclusion of a forward-looking statement in this press release should not be regarded as a representation that such plans, estimates, expectations or objectives will be achieved. The forward-looking statements should be read in conjunction with the risks and uncertainties discussed in with respect to Portman Ridge’s and Logan Ridge’s filings with the SEC, including their most recent Forms 10-K, Forms 10-Q and other SEC filings. Portman Ridge and Logan Ridge do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required to be reported under the rules and regulations of the SEC.

Additional Information and Where to Find It

This document relates to a potential business combination between Portman Ridge and Logan Ridge. In connection with the potential business combination, Portman Ridge and Logan Ridge may file with the SEC and mail to their respective stockholders documents that contain important information about Portman Ridge, Logan Ridge and the potential business combination. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act. STOCKHOLDERS OF PORTMAN RIDGE AND LOGAN RIDGE ARE URGED TO READ THE DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PORTMAN RIDGE, LOGAN RIDGE AND THE POTENTIAL BUSINESS COMBINATION. Investors and security holders will be able to obtain the documents filed with the SEC free of charge at the SEC’s website at http://www.sec.gov, or, for documents filed by Portman Ridge, from Portman Ridge’s website at https://www.portmanridge.com, and, for documents filed by Logan Ridge, from Logan Ridge’s website at https://www.loganridgefinance.com.

Contacts

Portman Ridge Finance Corporation
650 Madison Avenue, 3rd floor
New York, NY 10022

Brandon Satoren
Chief Financial Officer
Brandon.Satoren@bcpartners.com
(212) 891-2880

Patrick Schafer
Chief Investment Officer
Patrick.Schafer@bcpartners.com
(212) 891-2880

Logan Ridge Finance Corporation
650 Madison Avenue, 3rd floor
New York, NY 10022

Brandon Satoren
Chief Financial Officer
Brandon.Satoren@bcpartners.com
(212) 891-2880

Patrick Schafer
Chief Investment Officer
Patrick.Schafer@bcpartners.com
(212) 891-2880

FAQ

What exchange ratios are being considered for the LRFC and PTMN merger?

The companies are evaluating various exchange ratios beyond NAV-for-NAV, including relative market price and fixed exchange ratio options.

Who are the financial advisors for the LRFC-PTMN merger evaluation?

Logan Ridge has retained Houlihan Lokey, Inc., while Portman Ridge has engaged Keefe, Bruyette & Woods, Inc. as financial advisors.

What is the current status of the LRFC and PTMN business combination?

Both companies have formed special committees of independent directors to evaluate the potential business combination, but there is no guarantee the deal will be approved or completed.

When was the potential LRFC-PTMN merger first disclosed?

The potential business combination was previously disclosed in both companies' Form 10-Q filings with the SEC.