Prospect Capital Corporation Closes Acquisition of Patriot Capital
| Source: Prospect Capital Corporation
NEW YORK, NY--(Marketwire - December 2, 2009) - Prospect Capital Corporation (NASDAQ : PSEC )
("Prospect," "we," "us" or "our") announced today that it has completed the
acquisition of Patriot Capital Funding, Inc. ("Patriot") whereby Patriot
merged with and into Prospect, pursuant to the Agreement and Plan of Merger
(the "Merger Agreement") by and between Prospect and Patriot, dated August
3, 2009 (the "Merger").
Immediately prior to the consummation of the Merger, Patriot paid a final
distribution to its shareholders in an amount equal to its undistributed
net ordinary income and capital gains through December 2, 2009, pursuant to
the terms of the Merger Agreement. The amount of the final dividend was
$0.38 per share and was paid 10% in cash and 90% in newly issued shares of
Patriot common stock. The total cash distributed was $821,000 and an
additional 1,862,862 shares of Patriot common stock were issued. The shares
of Patriot common stock issued in connection with the final distribution
were converted into shares of Prospect common stock in accordance with the
terms of the Merger Agreement.
Also immediately prior to the consummation of the Merger, outstanding
shares of Patriot restricted stock became fully vested and all restrictions
with respect to such shares of restricted stock lapsed. A number of shares
of restricted stock were cancelled in exchange for a cash payment by
Prospect in an amount to cover tax obligations of the holders of the
restricted stock. All shares of restricted stock participated in the Merger
on the same basis as all outstanding shares of Patriot common stock.
All outstanding Patriot stock options were cancelled in exchange for a
payment in cash of $0.01 per share of common stock underlying the stock
options.
Pursuant to the terms of the Merger, each outstanding share of common stock
of Patriot, after adjusting for the restricted share cancellation and the
shares issued in conjunction with distribution described above, was
converted into the right to receive 0.363992 shares of Prospect common
stock, resulting in the conversion to approximately 8,444,000 newly issued
shares of Prospect common stock, subject to adjustment for fractional
shares to be paid in cash. Prospect now has approximately 63.35 million
shares outstanding.
At the Merger, Prospect repaid the outstanding amount of the Patriot credit
facility totaling $107.3 million through cash on hand and $60 million drawn
on Prospect's previously undrawn credit facility.
"We are delighted to close this acquisition for mutual benefit of Prospect
and Patriot shareholders," said Grier Eliasek, President and Chief
Operating Officer of Prospect. "As previously disclosed, we have an active
pipeline of new originations as well as other potential portfolio
acquisitions, including a sizeable portfolio under negotiation about which
we hope to disclose more details in the weeks to come."
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com) is a closed-end
investment company that lends to and invests in private and microcap public
businesses. Our investment objective is to generate both current income and
long-term capital appreciation through debt and equity investments.
We have elected to be treated as a business development company under the
Investment Company Act of 1940 ("1940 Act"). We are required to comply with
a series of regulatory requirements under the 1940 Act as well as
applicable NASDAQ, federal and state rules and regulations. We have elected
to be treated as a regulated investment company under the Internal Revenue
Code of 1986. Failure to comply with any of the laws and regulations that
apply to us could have an adverse effect on us and our shareholders.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, whose safe harbor
for forward-looking statements does not apply to business development
companies. Any such statements, other than statements of historical fact,
are highly likely to be affected by other unknowable future events and
conditions, including elements of the future that are or are not under our
control, and that we may or may not have considered; accordingly, such
statements cannot be guarantees or assurances of any aspect of future
performance. Actual developments and results are highly likely to vary
materially from these estimates and projections of the future. Such
statements speak only as of the time when made, and we undertake no
obligation to update any such statement now or in the future.