Daily News: October 25, 2017

Solar Senior Capital Acquires North Mill Capital

Solar Senior Capital acquired 100% of the equity interests of North Mill Capital. North Mill is a leading asset-based lending commercial finance company that provides senior secured asset-backed financings to U.S. based small-to-medium-sized businesses primarily in the manufacturing, services, and distribution industries.

Solar Senior Capital invested approximately $51 million to complete the transaction.

The addition of North Mill, with its infrastructure and experienced underwriting team, enhances Solar Senior’s platform as a diversified specialty finance company focused on senior secured cash flow and asset-based lending.

North Mill was founded in 2010. Based in Princeton, NJ, NMC has underwritten more than $500 million of total credit facilities to approximately 150 borrowers since inception. As of September 30, 2017, the highly diversified portfolio is comprised of $121 million of senior secured funded floating rate loans across approximately 85 issuers, with an average funded exposure per borrower of approximately $1.4 million.

NMC’s loans are collateralized on a first lien basis primarily by accounts receivable, along with inventory and/or other assets.

NMC is expected to distribute substantially all of its earnings to Solar Senior on a quarterly basis. Solar Senior anticipates its investment in NMC will generate a cash yield of approximately 11.0% and expects the acquisition to be immediately accretive to investment income in Q4/17.

Based on NMC’s existing portfolio, it is currently anticipated that the investment would generate investment income for Solar Senior in the range of $1.4 million to $1.5 million per quarter. Pro forma for the acquisition, Solar Senior’s net leverage is expected to be approximately 0.5x debt-to-equity.

“We believe that North Mill offers a compelling opportunity to invest in an established business operating in a less competitive niche with a management team that has consistently delivered incredibly strong credit performance,” said Michael Gross, chairman and CEO of Solar Senior.

“We at North Mill are excited to partner with Solar Senior Capital and the growth opportunities it provides the NMC platform,” said Jeff Goldrich, president and chief executive officer of NMC. “Solar Senior’s stable, long-term funding will enhance North Mill’s ability to provide innovative financing solutions to our clients.”

Solar Senior Capital is a closed-end investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. A specialty finance company with expertise in several niche markets, the company primarily invests directly and indirectly in leveraged, U. S. middle market companies in the form of cash flow senior secured loans including first lien and second lien debt instruments and asset-based loans including senior secured loans collateralized on a first lien basis primarily by current assets.