BCP Investment Corporation (BCIC) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates a larger, more diversified BDC platform managed by BC Partners, with over $600 million in assets and $270 million NAV, enhancing scale, trading volume, liquidity, and access to financing.

• Both companies share similar investment strategies and significant portfolio overlap, with over 70% of Logan Ridge's assets expected to be BC Partners-originated at closing.

• Combined company will focus on direct origination of senior secured debt to middle market companies, leveraging BC Partners' sourcing and sector expertise.

• The transaction aligns with a multi-year transformation and ongoing consolidation strategy, aiming to deliver strong, sustainable risk-adjusted returns.

Financial terms and conditions

• Logan Ridge shareholders will receive 1.5 newly issued Portman Ridge shares for each Logan Ridge share, representing a 4% premium to Logan's closing price on January 24, 2025, and a 17% premium to the September 11, 2024 price.

• Implied value of $25.02 per Logan Ridge share, about 96% of LRFC's NAV as of September 30, 2024.

• Portman Ridge's adviser will waive up to $1.5 million in incentive fees over eight quarters post-closing; Sierra Crest will waive up to $187,500 per quarter for two years.

• Logan Ridge will declare a tax distribution/dividend of $1.0–$1.5 million prior to close, equal to undistributed 2024 NII.

• The merger is expected to be immediately accretive to Portman Ridge's NAV by 1.3% and to core net investment income.

Synergies and expected cost savings

• Annual operating expense efficiencies of $2.8 million are expected, representing a 27% reduction.

• Immediate realization of cost savings post-closing, primarily from contractual reductions in board, audit, tax, and admin fees.

• Additional savings anticipated from lower liability costs and more efficient management of credit facilities due to increased scale.

• No execution risk for cost savings as they are formulaic and contractual.

• Further NII accretion expected from lower debt costs and improved financing terms.