Oaktree Specialty Lending closed its previously announced merger with Oaktree Strategic Income Corporation (OCSI), with Oaktree Specialty Lending as the surviving company. Based on Dec. 31, 2020 financial information, the combined company has more than $2.2 billion of assets on a pro forma basis.
“We are delighted to have completed this merger, which we believe represents an important step in our plan to further enhance shareholder value,” Armen Panossian, CEO and CIO of Oaktree Specialty Lending, said. “With this combination, we gain greater scale, portfolio diversity and financial flexibility while maintaining our strategy to invest in opportunities that align with Oaktree’s value-driven investment style.”
In connection with the merger, former OCSI stockholders will receive 1.3371 shares of Oaktree Specialty Lending for each share of OCSI based on the final exchange ratio, subject to payment of cash in lieu of fractional shares. As a result of the merger, legacy Oaktree Specialty Lending stockholders and former OCSI stockholders own approximately 78.2% and 21.8%, respectively, of the combined company at closing.
In addition, in connection with the closing of the merger, and as previously announced, Oaktree Specialty Lending and Oaktree Fund Advisers amended the existing investment advisory agreement to provide that Oaktree Fund Advisers will waive $750,000 of base management fees payable to it under the investment advisory agreement in each of the eight quarters immediately following the closing of the transaction (for an aggregate waiver of $6 million of base management fees).
Prior to the closing of the merger, OCSI’s board of directors determined that the amount of the previously announced contingent special distribution will be $0.10 per share, payable to OCSI stockholders of record as of March 17, 2021.
Keefe, Bruyette & Woods, a Stifel Company, served as financial advisor and Stradley Ronon Stevens & Young served as the legal counsel to the special committee of Oaktree Specialty Lending. Houlihan Lokey Capital served as financial advisor and Dechert served as the legal counsel to the special committee of OCSI. Proskauer Rose served as the legal counsel to Oaktree Specialty Lending, OCSI and Oaktree Fund Advisers.
