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-Solar Capital to acquire Crystal Financial.

M2 EQUITYBITES-December 18, 2012--Solar Capital to acquire Crystal Financial(C)2012 M2 COMMUNICATIONS

18 December 2012 -- New York-based closed-end investment firm Solar Capital Ltd. (NASDAQ: SLRC) that it has entered into a definitive agreement with SSP Energy Ltd., Quartz Managers LLC and Quantum Strategic Partners Ltd. to acquire commercial finance company Crystal Capital Financial Holdings LLC.

Crystal Capital is a commercial finance company focused on providing asset-based and other secured financing solutions. The firm's management team, including while at prior businesses, has underwritten and closed more than USD 20bn of transactions for its clients since 1993, Solar Capital said.

Solar Capital said it expects to invest approximately USD 275m to effect the acquisition. The current management team of Crystal Financial has committed to lead Crystal Financial going forward and will also make a meaningful investment as part of the transaction.

The firm said it expects that its acquisition of Crystal Financial will be immediately accretive to net investment income.

Crystal Financial currently oversees a directly originated and underwritten, diversified portfolio of 23 loans having a total par value of approximately USD 400m at November 30, 2012.

Solar Capital said it expects to fund its investment in Crystal Financial with available liquidity, including borrowings under Solar Capital's existing credit facilities.

The firm said its investment, together with Crystal Financial's current available liquidity under its USD 275m credit facility, provides Crystal Financial with significant growth capital. Crystal Financial's credit facility is expected to have approximately USD 145m of borrowings outstanding at closing and is non-recourse to Solar Capital.

Post-closing, Solar Capital expects Crystal Financial to be treated as a pass-through entity for tax purposes and to distribute a substantial portion of its current earnings to Solar Capital on a quarterly basis. Solar Capital expects its investment in Crystal Financial to generate a cash yield consistent with other assets in its portfolio.

1 USD = 0.617300 GBP

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Publication:M2 EquityBites (EQB)
Date:Dec 18, 2012
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