NEW YORK, June 26, 2019 /PRNewswire/ -- Investcorp Credit
Management US LLC ("Investcorp"), a subsidiary of Investcorp
Bank B.S.C., today announced that it has entered into a definitive
interest purchase agreement to acquire a majority ownership
interest in CM Investment Partners LLC ("CMIP"), the investment
adviser to CM Finance Inc ("CM Finance")
(Nasdaq: CMFN), through its purchase of the respective
equity positions held by certain funds managed by Cyrus Capital
Partners, L.P. ("Cyrus") and Stifel Venture Corp. ("Stifel"), and
newly issued interests in CMIP (the "Transaction"). As a result of
the Transaction, Investcorp will become the majority owner of CMIP
and Michael Mauer and Christopher Jansen, CMIP's Co-Chief Investment
Officers, will together maintain a minority ownership interest in
CMIP.
![Mohammed Alardhi, Executive Chairman of Investcorp Mohammed Alardhi, Executive Chairman of Investcorp](https://mma.prnewswire.com/media/929701/Investcorp___Mohammed_Alardhi.jpg)
Simultaneously therewith, Investcorp BDC Holdings Limited
entered into a definitive stock purchase and transaction agreement
with CM Finance (the "Stock Purchase Agreement"), pursuant to
which, during the two year-period following the closing, it will
purchase (i) newly issued shares of CM Finance's common stock in an
amount representing 5% of the total outstanding shares of common
stock as of the date of the Stock Purchase Agreement, at the most
recently determined net asset value per share of CM Finance's
common stock at the time of such purchase, and (ii) shares of CM
Finance's common stock in open-market transactions in an amount
representing 5% of the total outstanding shares of common stock as
of the date of the Stock Purchase Agreement.
"Investcorp's acquisition of CMIP is a strategic milestone for
us as we expand our credit product offerings by entering a new and
dynamic segment of the U.S. market," said Mohammed Alardhi,
Executive Chairman of Investcorp. "Our credit business is one of
the primary engines driving our global expansion both organically
and inorganically, and is critical to achieving our stated vision
of serving investors worldwide with a full array of alternative
products and solutions."
Formed in February 2013 by
Michael Mauer and Chris Jansen, CMIP is the investment adviser to
CM Finance, which seeks to invest primarily in middle-market
companies that have annual revenues of at least $50 million and EBITDA of at least $15 million, focusing on companies with leading
market positions, significant asset or franchise values, strong
free cash flow and experienced senior management teams.
CM Finance primarily invests in floating rate first lien, second
lien and unitranche loans, but also selectively invests in
mezzanine loans/structured equity and in the equity of portfolio
companies through warrants and other instruments.
"We are delighted to announce the acquisition of CMIP, marking
our entry into 'middle-market' lending in the U.S.," said
Rishi Kapoor, Co-CEO of Investcorp.
"We are seeing significant opportunities in this space and we
believe that this acquisition will enable us to broaden our
footprint in the U.S. credit market and capitalize on these
opportunities going forward. It also allows us to reach a new
investor segment, as we look to grow our client base including the
shareholders of CM Finance and other high-net-worth individuals in
the U.S."
"As we embark on this next phase of CMIP's evolution, we are
pleased to be joining the global Investcorp platform," said
Michael Mauer, Chairman and CEO of
CM Finance and Co-Chief Investment Officer of CMIP. "We believe our
expertise in middle-market lending will be a strong complement to
Investcorp's existing capabilities and distinguished track record
as a top-tier CLO manager and mid-market private equity
investor."
CM Finance's Board of Directors has unanimously approved the
Stock Purchase Agreement and the transactions contemplated thereby,
including the new investment advisory agreement (the "New Advisory
Agreement") pursuant to which CMIP will continue to serve as CM
Finance's investment adviser, and recommends that CM Finance's
stockholders approve the New Advisory Agreement. CM Finance intends
to hold a special meeting of stockholders as soon as practicable to
obtain the requisite stockholder approval, which is required under
the Investment Company Act of 1940.
Upon the receiving the requisite approval of the CM Finance
stockholders and the subsequent closing of the Transaction, CMIP is
expected to join the Investcorp platform and will remain the
investment adviser to CM Finance.
The Transaction, which is expected to close in the third quarter
of 2019, is subject to customary regulatory requirements and
closing conditions.
Raymond James acted as financial
advisor to Investcorp on the Transaction.
Conference Call Information
A conference call has been scheduled for 1:00 pm (Eastern Time) on Thursday, June 27,
2019. Representatives from both CM Finance and Investcorp will
participate in the call.
All interested parties may participate in the conference call by
dialing (888) 334-5784 approximately 5-10 minutes prior to the
call; international callers should dial (314) 696-0510.
Participants should reference CM Finance analyst conference call.
For those who are not able to listen to the call, a replay will be
available shortly after the call by visiting our website at
http://cmfn-inc.com/analyst-call-audio.
About Investcorp
Investcorp is a leading global manager of alternative
investments. Led by a renewed vision, Investcorp has embarked on a
growth strategy with continued focus on generating value through a
disciplined investment approach in four lines of business: private
equity, real estate, absolute return investments and credit
management.
As at March 31, 2019, Investcorp
had US$26.71 billion in
total AUM, including assets managed by third party managers and
assets subject to a non-discretionary advisory mandate where
Investcorp receives fees calculated on the basis of AUM.
Since its inception in 1982, Investcorp has made over 185
Private Equity deals in the U.S., Europe, the Middle
East and North Africa
region and Asia, across a range of
sectors including retail and consumer products, technology,
business services and industrials, and more than 600 commercial and
residential real estate investments in the US and Europe, for in excess of US $59 billion in transaction value.
Investcorp's Credit Management unit is a leading global credit
manager with assets under management of approximately $11.7 billion invested primarily in senior
secured corporate debt issued by mid and large-cap corporates in
Western Europe and the U.S.
Investcorp employs approximately 400 people across its offices
in Bahrain, New York, London, Abu
Dhabi, Riyadh, Doha, Mumbai
and Singapore. For further
information, including our most recent periodic financial
statements, which details our assets under management, please refer
to:
Website:
www.investcorp.com
Twitter: www.twitter.com/Investcorp
LinkedIn: www.linkedin.com/company/Investcorp
About CM Finance Inc
CM Finance Inc ("CM Finance") is an externally-managed,
closed-end, non-diversified management investment company that has
elected to be regulated as a business development company under the
Investment Company Act of 1940. CM Finance's investment objective
is to maximize the total return to its stockholders in the form of
current income and capital appreciation through debt and related
equity investments by targeting investment opportunities with
favorable risk-adjusted returns. CM Finance seeks to invest
primarily in middle-market companies that have annual revenues of
at least $50mm and earnings before interest, taxes, depreciation
and amortization of at least $15mm. CM Finance's investment
activities are managed by its investment adviser, CM Investment
Partners LLC. To learn more about CM Finance Inc, please visit
www.cmfn-inc.com.
About CM Investment Partners LLC
CM Investment Partners LLC ("CMIP") serves as the external
investment adviser to CM Finance Inc (Nasdaq: CMFN), and is
responsible for sourcing investment opportunities, conducting
industry research, performing diligence on potential investments,
structuring investments and monitoring portfolio companies on an
ongoing basis.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking" statements,
including statements regarding the proposed transaction. All
statements, other than historical facts, including but not limited
to statements regarding the expected timing of the closing of the
proposed transaction; the ability of the parties to complete the
proposed transaction considering the various closing conditions;
the expected benefits of the proposed transaction such as improved
operations, enhanced revenues and cash flow, growth potential,
market profile and financial strength; the competitive ability and
position of CM Finance following completion of the proposed
transaction; and any assumptions underlying any of the foregoing,
are forward-looking statements. Forward-looking statements concern
future circumstances and results and other statements that are not
historical facts and are sometimes identified by the words "may,"
"will," "should," "potential," "intend," "expect," "endeavor,"
"seek," "anticipate," "estimate," "overestimate," "underestimate,"
"believe," "could," "project," "predict," "continue," "target" or
other similar words or expressions. 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. The inclusion of such statements should
not be regarded as a representation that such plans, estimates or
expectations will be achieved. Important factors that could cause
actual results to differ materially from such plans, estimates or
expectations include, among others, (1) that one or more
closing conditions to the transaction may not be satisfied or
waived, on a timely basis or otherwise, including that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of the proposed transaction, may require
conditions, limitations or restrictions in connection with such
approval or that the required approval by the stockholders of CM
Finance may not be obtained; (2) the risk that the proposed
transaction may not be completed in the time frame expected by
parties, or at all; (3) unexpected costs, charges or expenses
resulting from the proposed transaction; (4) uncertainty of
the expected financial performance of CM Finance following
completion of the proposed transaction; (5) failure to realize
the anticipated benefits of the proposed transaction, including as
a result of delay in completing the proposed transaction;
(6) the ability of CM Finance to implement its business
strategy; (7) the occurrence of any event that could give rise
to termination of the agreements; (8) the risk that
shareholder litigation in connection with the proposed transaction
may affect the timing or occurrence of the contemplated transaction
or result in significant costs of defense, indemnification and
liability; (9) evolving legal, regulatory and tax regimes;
(10) changes in general economic and/or industry specific
conditions; and (11) other risk factors as detailed from time
to time in CM Finance's reports filed with the Securities and
Exchange Commission ("SEC"), including CM Finance's annual report
on Form 10-K for the year ended June 30, 2018, periodic quarterly reports on
Form 10-Q, periodic current reports on
Form 8-K and other documents filed with the SEC.
Any forward-looking statements speak only as of the date of this
press release. Investcorp does not undertake any obligation to
update any forward-looking statements, whether as a result of new
information or developments, future events or otherwise, except as
required by law. Readers are cautioned not to place undue reliance
on any of these forward-looking statements.
Additional Information and Where to Find It
In connection with the proposed transaction, CM Finance plans to
file with the SEC and mail to its stockholders a proxy statement on
Schedule 14A (the "Proxy Statement"). The Proxy Statement will
contain important information about CM Finance, CMIP, Investcorp,
the proposed transaction and related matters. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT, AS WELL AS
ANY AMENDMENTS OR SUPPLEMENTS THERETO, CAREFULLY AND IN ITS
ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT CM FINANCE, CMIP, INVESTCORP, THE
PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security
holders will be able to obtain the Proxy Statement and other
documents filed with the SEC by CM Finance, free of charge, from
the SEC's web site at www.sec.gov and from CM Finance's web site at
www.cmfn-inc.com. Investors and security holders may also obtain
free copies of the Proxy Statement and other documents filed with
the SEC from CM Finance by calling Investor Relations at (212)
257-5199.
Participants in the Solicitation
CM Finance and its directors, executive officers and other
persons may be deemed to be participants in the solicitation of
proxies from the stockholders of CM Finance common stock in respect
of the approval of the New Advisory Agreement. Information
regarding CM Finance's directors and executive officers is
available in its definitive proxy statement for CM Finance's 2018
annual meeting of stockholders filed with the SEC on September 20, 2018 (the "CM Finance 2018 Proxy
Statement"), as modified or supplemented by any Form 3 or Form 4
filed with the SEC since the date of the CM Finance 2018 Proxy
Statement. Other information regarding the interests of the
participants in the proxy solicitation will be included in the
Proxy Statement if and when it becomes available. These documents
can be obtained, or will be available, free of charge from the
sources indicated above.
Media Contacts:
Investcorp
Firas El Amine
+973 3998 7838
felamine@investcorp.com
Prosek Partners
Catherine Johnson
+1 212 279 3115
cjohnson@prosek.com
CM Finance Inc
Investor Relations
212-257-5199
investorrelations@cmfn-inc.com
1 AUM includes approximately $2.1 billion of hedge fund partnerships
(including exposure through multi-manager solutions), managed by
third party managers and assets subject to a non-discretionary
advisory mandate, where Investcorp receives fees calculated on the
basis of AUM. Real estate investments are stated at gross
asset value.
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SOURCE Investcorp