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Barings BDC to Merge with MVC Capital in Deal Valued at USD 177.5m
Thursday 13 August 2020

US-based investment company Barings BDC, Inc. (NYSE: BBDC) has agreed to a definitive merger agreement under which New York-based business development company MVC Capital will merge with and into Barings BDC in a deal valued at USD 177.5m, the company said.

Under the terms of the merger agreement, MVC Capital stockholders will receive aggregate consideration in the form of cash and stock consideration based on Barings BDC's June 30, 2020 net asset value representing total book value consideration of USD 10.01 per fully diluted MVC Capital share.

On a market value basis, based on the closing price of Barings BDC common stock on August 10, 2020, the Transaction represents total consideration for MVC Capital stockholders of USD 145.5m or approximately USD 8.21 per share, representing a premium of 21% to MVC Capital's closing price on August 10, 2020.

MVC Capital stockholders will receive 0.94024 Barings BDC shares for each MVC Capital share, resulting in approximately 16.7 m newly issued Barings BDC shares, having total value of USD 170.5m, or USD 9.62 per share. In addition, Barings LLC will pay approximately USD 7m in cash, or USD 0.39492

In connection with the closing of the proposed Transaction, MVC Capital will repay all outstanding amounts under its existing credit facilities and any remaining obligations thereunder will be terminated.

In addition, in connection with the closing of the proposed Transaction, Barings BDC intends to redeem MVC Capital's 6.25% senior notes due November 30, 2022 (NYSE: MVCD) with an aggregate principal amount outstanding of USD 95.0m.

J.P. Morgan served as sole financial advisor and Dechert LLP served as legal counsel to Barings BDC. JMP Securities served as financial advisor and Kramer Levin Naftalis and Frankel LLP served as legal counsel to MVC Capital.

Barings BDC, Inc. (NYSE: BBDC) is an externally managed investment company operating as a business development company. Barings BDC's investment activities are managed by its investment adviser, Barings LLC, a global asset manager based in North Carolina.

MVC Capital is a business development company that provides long-term debt and equity investment capital to fund growth, acquisitions and recapitalisations of companies in a variety of industries.
Date Published: 13/08/2020