Fifth Street Finance announced it has successfully closed its portfolio company acquisition of Healthcare Finance Group.

Fifth Street said it invested $114 million to effect the acquisition, financing the purchase with available liquidity, including operating cash and borrowings under Fifth Street’s existing credit facilities. Fifth Street expects the acquisition to be immediately accretive to net investment income.

Fifth Street also said with more than 20 years of healthcare finance or related industry experience, HFG’s senior management team will provide continuing leadership under the direction of the company’s new chief executive officer, Dan Chapa. Chapa, who previously served as HFG’s president, as well as a member of its board of directors and credit committee, replaces HFG’s former chief executive officer and founding member, Isaac Soleimani. The senior management team will also have a meaningful ownership stake as part of the transaction.

An asset-based and cash flow term loan lending specialist, HFG has long-standing expertise in the healthcare industry. Since inception, HFG has financed in excess of $21 billion in receivables. HFG’s sophisticated and highly scalable operating platform includes an internally-developed technology system that facilitates daily credit monitoring and insight into customer performance. The proprietary system is highly adaptable, with additional capabilities that can be leveraged as the platform continues to expand.

“We believe this strategic investment will reinforce Fifth Street and HFG’s respective healthcare expertise,” noted Leonard M. Tannenbaum, Fifth Street’s chief executive officer, adding, “We expect that this acquisition will provide extraordinary opportunities for platform growth especially as we assist HFG in exploring alternative applications for its proprietary collateral and loan performance technology.”

For the transaction, Keefe, Bruyette & Woods and UBS Investment Bank acted as financial advisors and Kaye Scholer served as legal advisor to HFG. Greenhill & Co. acted as financial advisor and Proskauer Rose served as legal advisor to Fifth Street.

Previously on

Fifth Street Finance to Acquire Healthcare Finance Group, Wednesday, May 8, 2013