Portman Ridge Finance Corp agreed to acquire OHA Investment Corp.
The combined company will be externally managed by Sierra Crest Investment Management LLC and is expected to have total assets of approximately $372 million and net asset value of approximately $181 million.
Based on the March 31 net asset values of OHA Investment and Portman Ridge and adjusted for expected transaction expenses, the agreement values OHA Investment shares at approximately $1.46 per share, which represents a 35% premium to OHA Investment's July 30 closing price.
Following the closure of the deal, current OHA Investment shareholders will own approximately 16% of the combined company. OHA Investment's credit facility will be paid off in full at the closing of the deal. Based on Portman Ridge's lower cost of borrowing, the combined company expects to realize interest savings of approximately $500,000 per year, according to a release.
Under the terms of the agreement, if at any time within a year after the deal closes, shares of Portman Ridge trade at a price below 75% of its net asset value, the company will commence a share repurchase program of up to $10 million to support the trading price of the combined entity.
Keefe Bruyette & Woods was exclusive financial adviser to the special committee of OHA Investment's board. Dechert LLP was counsel to OHA Investment and the special committee of OHA Investment's board. UBS Investment Bank was financial adviser, and Simpson Thacher & Bartlett LLP was counsel to Portman Ridge.