Solar Capital To Acquire Crystal Financial

  • BDC Solar Capital focuses on mid-market
  • Crystal Financial team to remain
  • Increase in growth capital for lending

Business development company Solar Capital Ltd agreed to acquire commercial finance company Crystal Capital Financial Holdings LLC, the firm announced. Crystal Financial’s business of assisting issuers with unique financing needs offers the potential for attractive returns irrespective of economic or debt capital market conditions, the statement said.

“We believe that this portfolio company investment offers a highly attractive and diversified senior secured risk-return profile for Solar Capital,” said Bruce Spohler, chief operating officer of Solar Capital. “We expect that our Crystal Financial investment will move us toward our target debt-to-equity ratio while increasing Solar Capital’s net investment income.”

Solar Capital invests primarily in leveraged, mid-market companies in the form of senior secured loans, mezzanine loans, and equity securities, sister service Thomson Reuters Loan Pricing Corp. reported. Crystal Financial focuses on providing asset-based and other secured financing solutions. It currently oversees a directly originated and underwritten, diversified portfolio of 23 loans having a total par value of approximately $400 million at Nov. 30, 2012.

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.

“We are excited about our new relationship with Solar Capital and the growth opportunities it presents,” said Ward Mooney, chief executive officer of Crystal Financial LLC. “Solar Capital’s stable, long-term funding will enhance our ability to provide innovative financing solutions to our clients.”

Solar Capital expects to invest approximately $275 million to effect the acquisition. It plans to fund its investment in Crystal Financial with available liquidity, including borrowings under Solar Capital’s existing credit facilities. Solar Capital’s investment, together with Crystal Financial’s current available liquidity under its $275 million credit facility, provides Crystal Financial with significant growth capital.

Crystal Financial’s credit facility is expected to have approximately $145 million of borrowings outstanding at closing and is non-recourse to Solar Capital. Solar Capital entered into a definitive agreement, dated Dec. 17, 2012, with SSP Energy Ltd, Quartz Managers LLC and Quantum Strategic Partners Ltd to acquire Crystal Capital Financial Holdings LLC.

Leela Parker is a senior correspondent for Thomson Reuters LPC.