Great Elm Capital Corp. Announces Acquisition of Majority Interest in Lenders Funding, LLC
September 20 2021 - 4:05PM
Great Elm Capital Corp. (“we,” “us,” “our,” or “GECC,”) (NASDAQ:
GECC), a business development company, today announced that it has
acquired a majority equity interest in Lenders Funding, LLC
(“Lenders Funding”) a private funding and risk sharing source for
factors and asset-based lenders.
Established in 2000, Lenders Funding purchases
participations in factoring and asset-based lending transactions as
well as provides working capital to customers under a variety of
lending programs.
Transaction DetailsGECC is
purchasing a majority ownership position in Lenders Funding for
$7.25 million, consisting of $4 million in cash and $3.25 million
in GECC shares issued at GECC’s net asset value (NAV). In
connection with the transaction, GECC will also issue to Lenders
Funding $10 million of additional GECC shares at NAV in exchange
for a subordinated note in an equal principal amount. The proceeds
from the transaction will be retained by Lenders Funding to help
support the growth of the business.
Founder and CEO Mr. Robert A. Zadek will
continue to own the remaining equity in Lenders Funding and manage
the business along with Harvey Friedman and Jean Madden. Mr. Zadek
has been active in commercial finance and factoring for fifty
years, as an attorney, lecturer, and lender. He was instrumental in
the formation of the International Factoring Association and was an
instructor for the Commercial Finance Association.
Management CommentaryPeter A.
Reed, GECC’s Chief Executive Officer, stated, “We are pleased to
announce the acquisition of a majority interest in Lenders Funding
as we continue to weight our portfolio more heavily toward
specialty finance. Lenders Funding has an excellent, long-term
track record of profitably growing its business while maintaining a
very strong underwriting culture. We are excited to partner with
Bob, a well-known and highly regarded decision maker in asset-based
lending. This transaction gives us additional access to proprietary
overflow opportunities as well as visibility into the specialty
finance market through the relationships with the many businesses
to which Lenders Funding provides capital. We look forward to
supporting Lenders Funding’s growth and expanding our partnership
over time.”
Mr. Zadek noted, “Throughout our history, we
have specialized in providing creative lending solutions to factors
and other asset based lenders. We are delighted to have a partner
in Great Elm that can help enhance the earnings generated by our
lending model in addition to understanding both our credit and
corporate culture.”
About Lenders Funding,
LLCLenders Funding is a private funding and risk sharing
source for factors and asset-based lenders. It purchases
participations in their transactions on a non-recourse basis or
provides working capital to them under a variety of flexible
programs. Since its formation, Lenders Funding has worked with over
150 lenders and factors and have supplied several hundred million
dollars in funding. Additional information on the company can be
found at www.lendersfunding.com.
About Great Elm Capital Corp.
Great Elm Capital Corp. is an externally managed business
development company that seeks to generate current income and
capital appreciation by investing in debt and income generating
equity securities, including investments in specialty finance
businesses. Additional information can be found at
www.greatelmcc.com.
Cautionary Statement Regarding
Forward-Looking Statements Statements in this
communication that are not historical facts are “forward-looking”
statements within the meaning of the federal securities laws. These
statements are often, but not always, made through the use of words
or phrases such as “expect,” “anticipate,” “should,” “will,”
“estimate,” “designed,” “seek,” “continue,” “upside,” “potential”
and similar expressions. All such forward-looking statements
involve estimates and assumptions that are subject to risks,
uncertainties and other factors that could cause actual results to
differ materially from the results expressed in the statements.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements
are: conditions in the credit markets, the price of GECC common
stock, the performance of GECC’s portfolio and investment manager
and risks associated with the economic impact of the COVID-19
pandemic on GECC and its portfolio companies. Information
concerning these and other factors can be found in GECC’s Annual
Report on Form 10-K and other reports filed with the SEC. GECC
assumes no obligation to, and expressly disclaims any duty to,
update any forward-looking statements contained in this
communication or to conform prior statements to actual results or
revised expectations except as required by law. Readers are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof.
Media & Investor Contact:
Investor Relations
investorrelations@greatelmcap.com
Adam PriorThe Equity Group Inc.+1 (212)
836-9606aprior@equityny.com
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