Houlihan Lokey Advises the Special Committee of BlackRock TCP Capital Corp.

Houlihan Lokey is pleased to announce that BlackRock TCP Capital Corp. (NASDAQ:TCPC) (TCPC) has merged with BlackRock Capital Investment Corp. (NASDAQ:BKCC) (BCIC). Houlihan Lokey served as the exclusive financial advisor to the special committee of TCPC. The transaction closed on March 18, 2024.

In connection with the merger, former BCIC shareholders received 0.3834 newly issued shares of TCPC common stock based on the final exchange ratio determined shortly before closing. As a result of the merger, legacy TCPC shareholders and former BCIC shareholders own approximately 67.5% and 32.5%, respectively, of the combined company.

Also, in connection with the closing, TCPC’s advisor has agreed to:

1. A reduction in the base management fee rate from 1.50% to 1.25% on assets equal to or below 200% of the net asset value of TCPC.
2. A waiver of all or a portion of its advisory fees to the extent that the adjusted net investment income of TCPC on a per share basis in such quarter is less than $0.32 per share in any of the first four fiscal quarters ending after the closing of the transaction.

As a larger entity, the combined company is expected to have enhanced scale, improved access to capital (including the potential to access debt financing on more favorable terms), and meaningful operating expense synergies. The merger is expected to drive accretion of net investment income through reduced management fees, lower combined operating expenses, and opportunities to grow the portfolio through combined leverage capacity.

TCPC is a specialty finance company focused on direct lending to middle-market companies as well as small businesses. TCPC lends primarily to companies with established market positions, strong regional or national operations, differentiated products and services, and sustainable competitive advantages, investing across industries in which it has significant knowledge and expertise. TCPC’s investment objective is to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection.

BCIC was a publicly traded business development company that provided debt and equity capital to middle-market companies.

This transaction highlights Houlihan Lokey’s market-leading position advising business development companies and managers across a variety of strategic initiatives and represents its fourth completed related party BDC merger in the past three years and its 12th announced BDC transaction since 2015.