Sierra, MCC and MDLY Announce Merger to Create 2nd Largest Internally Managed BDC
Sierra, MCC and MDLY have entered into definitive agreements for Sierra to acquire MCC and MDLY. MCC will merge with and into Sierra, with Sierra as the surviving company. Simultaneously, Sierra will acquire MDLY, and MDLY's existing asset management business will operate as a wholly-owned subsidiary of Sierra. The Boards of Directors of Sierra, MCC and MDLY unanimously approved the transactions based on recommendations of independently advised special committees of independent directors at each company, respectively.
- The combined company will have over
$5 billionof assets under management, including $2 billionof internally managed assets1
- Sierra is expected to be the second largest internally managed Business Development Company ("BDC") and the seventh largest publicly traded BDC
- Expected to be accretive to net investment income per share for both Sierra and MCC
- Expected to increase liquidity for shareholders of Sierra, MCC and MDLY
The transaction is expected to add scale to the BDC platform, increase operational efficiencies, create a stronger balance sheet and improve portfolio diversification. In addition, growth of MDLY's existing asset management business would add to NII and NAV over time.
The senior leadership and the investment management teams will remain intact as part of this transaction. The board of Sierra following the transaction will consist of the current independent directors from Sierra, one interested director from Sierra and two independent directors from MCC.
MCC shareholders will receive 0.8050 shares of
MDLY Class A shareholders will receive 0.3836 shares of
Medley LLC Unitholders have agreed to convert their units into MDLY Class A Common Stock, and will receive 0.3836 shares of
At close, current Sierra shareholders will continue to own shares of
"We are excited to bring together these three complementary entities to create a single, large-scale BDC and credit manager," said
The mergers are cross conditioned upon each other and are subject to approval by Sierra, MCC and MDLY shareholders, regulatory review, other customary closing conditions and third party consents. The transaction is expected to close in the fourth quarter of 2018 or early in 2019.
- The Special Committee of Sierra Income Corporation's Board of Directors is served by financial advisor
Broadhaven Capital Partners, LLCand legal counsel Sullivan & Worcester LLP
- The Special Committee of Medley Capital Corporation's Board of Directors is served by financial advisor Sandler O'Neill + Partners, L.P. and legal counsel
Kramer Levin Naftalis & Frankel LLP
- The Special Committee of Medley Management Inc.'s Board of Directors is served by financial advisor
Barclays Capital Inc.and legal counsel Potter Anderson & Corroon LLP Medley Management Inc.is served by financial advisor Goldman Sachs & Co. LLCand legal counsel Eversheds Sutherland (US) LLP
Joint Conference Call
Sierra, MCC and Medley will host a joint conference call at
All interested parties are welcome to participate and can access the conference call by dialing (877) 524-5743 and using the conference ID 5547448 approximately 10 minutes prior to the call. For interested parties, an archived replay of the joint conference call will be available by dialing (855) 859-2056 and using the conference ID 5547448. This conference call will be broadcast live over the Internet and can be accessed by all interested parties through Medley's website, http://www.mdly.com. To listen to the live call, please go to Medley's website at least 15 minutes prior to the start of the call to register and download any necessary audio software.
An archived replay will also be available through a webcast link located on the page of the Investor Relations section of Medley's website.
A joint slide presentation containing supplemental information from Sierra, MCC and Medley will be referenced on the conference call and is available on each of the entities' websites.
1 Estimates of Sierra's post-merger financial position are based on the publicly reported financial information of Sierra, MCC and MDLY as of
2 Medley Management Inc. is the parent company of Medley LLC and several registered investment advisors (collectively, "Medley"). Assets under management refers to assets of our funds, which represents the sum of the net asset value of such funds, the drawn and undrawn debt (at the fund level, including amounts subject to restrictions) and uncalled committed capital (including commitments to funds that have yet to commence their investment periods). Assets under management are as of June 30, 2018.
ABOUT SIERRA INCOME CORPORATION
Sierra is a non-traded business development company ("BDC") that invests primarily in first lien senior secured debt, second lien secured debt and, to a lesser extent, subordinated debt of middle market companies in a broad range of industries with annual revenue between
Medley is an alternative asset management firm offering yield solutions to retail and institutional investors. Medley's national direct origination franchise is a premier provider of capital to the middle market in the U.S. Medley has over $5 billion of assets under management in two business development companies,
This communication contains "forward-looking" statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements regarding the proposed transactions. Such forward-looking statements reflect current views with respect to future events and financial performance, and each of Sierra, MCC and Medley may make related oral forward-looking statements on or following the date hereof. Statements that include the words "should," "would," "expect," "intend," "plan," "believe," "project," "anticipate," "seek," "will," and similar statements of a future or forward-looking nature identify forward-looking statements in this material or similar oral statements for purposes of the U.S. federal securities laws or otherwise. Because forward-looking statements, such as the date that the parties expect the proposed transactions to be completed and the expectation that the proposed transactions will provide improved liquidity for Sierra, MCC, and Medley stockholders and will be accretive to net investment income for both Sierra and MCC, include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in each of Sierra's, MCC's and Medley's filings with the
The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that will be included in the Joint Proxy Statement/Prospectus (as defined below) relating to the proposed transactions, and in the "Risk Factors" sections of each of Sierra's, MCC's and Medley's most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q. The forward- looking statements in this press release represent Sierra's, MCC's and Medley's views as of the date of hereof. Sierra, MCC and Medley anticipate that subsequent events and developments will cause their views to change. However, while they may elect to update these forward-looking statements at some point in the future, none of Sierra, MCC or Medley have the current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing Sierra's, MCC's or Medley's views as of any date subsequent to the date of this material.
Additional Information and Where to Find It
In connection with the proposed transactions, Sierra intends to file with the
Participants in the Solicitation
Sierra, MCC, and Medley and their respective directors, executive officers, other members of their management, employees and other persons may be deemed to be participants in the anticipated solicitation of proxies in connection with the proposed transactions. Information regarding Sierra's directors and executive officers is available in its definitive proxy statement for its 2018 annual meeting of stockholders filed with the
No Offer or Solicitation
The information in this press release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction pursuant to or in connection with the proposed transactions or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Investor Relations Contact:
Head of Capital Markets & Risk