425: BlackRock TCP Capital Corp. and BlackRock Capital Investment Corporation Announce Shareholder Approval of Merger

Shareholders of BlackRock TCP Capital Corp. and BlackRock Capital Investment Corporation overwhelmingly approved the merger of the two business development companies at a special meeting held on March 7, 2024.

Summary

• BlackRock TCP Capital Corp. (TCPC) and BlackRock Capital Investment Corporation (BCIC) announced that shareholders approved the proposed merger at a special meeting on March 7, 2024.
• Over 90% of shareholders represented at each meeting voted in favor of the merger.
• The merger is expected to close as soon as practicable, subject to closing conditions.
• Following the merger, the surviving entity will continue as an indirect wholly-owned subsidiary of TCPC, trading on the Nasdaq Global Select Market under the ticker symbol TCPC.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the overwhelming shareholder approval of the merger and management's optimistic outlook regarding the combined company's future prospects.

Positives

• Shareholders overwhelmingly approved the merger, indicating strong support for the transaction.
• Management believes the merger will leverage the combined company's scale to invest in attractive middle market companies.
• The merger is expected to enhance BlackRock's ability to provide clients with industry-leading private credit products and services.

Risks

• The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected.
• These risks include the timing or likelihood of the merger closing, expected synergies and savings, and the ability to realize anticipated benefits.
• Other risks include competing offers, conditions to the consummation of the merger not being satisfied, and potential stockholder litigation.

Future Outlook

The merger is expected to close as soon as practicable, subject to closing conditions being satisfied, with the combined company continuing to trade on the Nasdaq under the ticker TCPC.

Management Comments

• Rajneesh Vig stated that they are excited about the opportunity to leverage the combined company's scale to further their strategy of investing in attractive middle market companies.
• James Keenan said that the merger is a strategic next step in the growth and evolution of BlackRock's BDC platform.

Industry Context

This merger reflects a trend of consolidation within the business development company (BDC) sector, potentially driven by the desire to achieve greater scale, reduce operating costs, and enhance access to capital.

Comparison to Industry Standards

• Comparable BDC mergers include Prospect Capital's acquisition of First Tower Capital, which aimed to increase investment diversification and operational efficiency.
• Another example is the merger between Fifth Street Finance Corp. and Healthcare Trust, Inc., which sought to create a larger, more diversified BDC focused on healthcare investments.
• These mergers, like the TCPC and BCIC deal, often promise enhanced scale and cost synergies, but their success depends on effective integration and portfolio management.

Stakeholder Impact

• Shareholders of both companies are expected to benefit from the potential synergies and enhanced scale of the combined entity.
• Clients may benefit from a broader range of private credit products and services.
• Employees may experience changes as the two companies integrate their operations.

Next Steps

• Closing the merger, subject to the satisfaction of closing conditions.
• Integrating the operations of BCIC into TCPC.
• Continuing to invest in middle-market companies under the TCPC banner.

Key Dates