By Lisa Kerner
Charlotte, N.C., Aug. 3 - Prospect Capital Corp. announced it agreed to acquire Patriot Capital Funding, Inc. for $197 million, or 54% of equity book value.
Each Patriot share will be exchange for approximately 0.3992 Prospect shares, or a total of 8,616,467 Prospect shares for 21,584,251 Patriot shares.
Under the terms of the companies' definitive agreement, Prospect will repay Patriot's debt of about $110.5 million in cash when the acquisition closes, according to a Prospect news release.
Both companies' boards of directors have approved the deal, which is expected to close in the next 60 days subject to approval by Patriot stockholders.
"The Patriot acquisition is a perfect example of our previously stated strategy to go on offense in the current opportunity-rich marketplace in which competitors have faltered with overleveraged balance sheets," Prospect president M. Grier Eliasek said in the release.
Prospect, a New York venture capital and private equity firm, said the acquisition will increase its gross assets by more than 35% and its equity capitalization by more than 14%.
Patriot is a Westport, Conn., private equity firm.
| Acquirer: | Prospect Capital Corp.
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| Target: | Patriot Capital Funding, Inc.
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| Announcement date: | Aug. 3
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| Price per share: | 0.3992 Prospect shares
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| Expected closing: | Within 60 days
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| Stock price of acquirer: | Nasdaq: PSEC: $10.02 on July 31
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| Stock price of target: | Nasdaq: PCAP: $1.95 on July 31
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