Houlihan Lokey Advises SLR Senior Investment Corp.

Houlihan Lokey is pleased to announce that SLR Senior Investment Corp. (NASDAQ:SUNS; SUNS), a middle-market business development company (BDC), has agreed to merge with SLR Investment Corp. (NASDAQ:SLRC; SLRC). Houlihan Lokey served as exclusive financial advisor to the special committee of SUNS. The transaction is expected to close in the first half of 2022.

Under the terms of the proposed merger, SUNS shareholders will receive an amount of SLRC shares with a net asset value (NAV) equal to the NAV of SUNS shares that they hold at the time of closing. The exchange ratio will be determined at closing such that shares issued by SLRC to SUNS shareholders will result in an ownership split of the combined company based on the respective NAVs of both SLRC and SUNS. For illustrative purposes, based on September 30, 2021, net asset values, and transaction costs, SLRC would issue approximately 0.7763 shares for each SUNS share outstanding, resulting in pro forma ownership of 77.2% for current SLRC stockholders and 22.8% for current SUNS stockholders. The boards of directors of both SUNS and SLRC, on the recommendation of separate special committees consisting only of certain independent directors, have unanimously approved the transaction.

SLR Capital Partners, LLC (SLR Capital Partners) will continue to serve as the external investment adviser of the combined company, and all current SLRC officers and directors will remain in their current positions. Effective upon closing of the merger, SLR Capital Partners has voluntarily agreed to a permanent 25 basis point reduction of the base management fee, resulting in a base management fee of 1.50% on gross assets up to 1.00x debt-to-equity and 1.00% on gross assets over 1.00x debt-to-equity.

The pro forma combined company would have had over $2 billion of assets invested in more than 125 portfolio companies as of September 30, 2021. The combined investment portfolio would have been composed of approximately 65% senior secured loans and approximately 35% equity, of which the substantial majority is invested in commercial finance companies who lend and/or lease on a senior secured first lien basis. Investments on nonaccrual would have been low at 1.5% of the combined portfolio at fair value.

SLR Investment Corp. is a BDC with expertise in several niche markets that primarily invests directly and indirectly in leveraged, U.S. middle-market companies in the form of cash flow senior secured loans, including first lien and second lien debt instruments and asset-based loans such as senior secured loans collateralized on a first lien basis primarily by current assets.

SLR Senior Investment Corp. is a BDC with expertise in several niche markets that primarily invests directly and indirectly in leveraged, U.S. middle-market companies in the form of cash flow first lien senior secured debt instruments and asset-based loans, including senior secured loans collateralized on a first lien basis primarily by current assets.

Houlihan Lokey served as exclusive financial advisor.