TCG BDC, Inc. (LON:TCG) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive Agreement
On May3, 2017, TCG BDC, Inc. (the Company) entered into an
Agreement and Plan of Merger (the Agreement) with NF Investment
Corp. (NFIC), an externally managed, non-diversified closed-end
investment company that has elected to be regulated as a business
development company under the Investment Company Act of 1940, as
amended (the Investment Company Act). Both the Company and NFIC
are managed by Carlyle GMS Investment Management L.L.C. (the
Investment Adviser). A description of the Merger Agreement is set
forth below and is qualified in its entirety to the full text of
the Merger Agreement, which is included in the preliminary proxy
statement filed by NFIC on Schedule 14A in respect of the
proposed Merger on May5, 2017 and is incorporated by reference
herein.
to the Agreement, among other things and subject to certain
conditions described therein, NFIC will merge with and into the
Company (the Merger), with the Company as the surviving entity.
The respective boards of directors of the Company and NFIC,
including the directors who are not interested persons as defined
in Section 2(a)(19) of the Investment Company Act (Independent
Directors), determined that the Merger would be in the best
interests of each of the Company and NFIC, and that the interest
of their respective existing stockholders would not be diluted as
a result of the Merger, and further approved the Merger upon the
terms and subject to the conditions and limitations set forth in
the Agreement. The closing of the Merger (the Closing) is
expected to occur on June7, 2017, or such other date as the
parties may agree (the Closing Date), subject to the satisfaction
or waiver of certain closing conditions, as described below. It
is expected that the Merger will result in the recognition of
capital gain or loss for U.S. federal income tax purposes by
holders of common stock of NFIC.
If the proposed Merger is consummated, NFIC will cease to exist
as a separate corporation, and each share of common stock of NFIC
will be converted into the right to receive a mixture of cash and
shares of common stock of the Company, par value $0.01 per share
(the Acquisition Shares and together with such cash, the Merger
Consideration), in accordance with the elections of the
stockholders of NFIC (each, an Election, under which at least 5%
of the Merger Consideration received by each stockholder of NFIC
must be in the form of Acquisition Shares). In accordance with
the Maryland General Corporation Law, the Agreement provides that
the maximum number of Acquisition Shares that may be issued is
20% of the outstanding shares of common stock of the Company
immediately prior to the effective time of the Merger (the
Effective Time). In light of the relative net asset values of the
parties, this limit will not impact the Elections of the
stockholders of NFIC. The net asset value of the Merger
Consideration that each stockholder of NFIC is entitled to
receive under the Agreement will be equal to the net asset value
of such stockholders shares of common stock of NFIC valued in
accordance with the procedures described below. The stockholders
of NFIC will receive fractional Acquisition Shares, if
applicable, to the second decimal place.
Each stockholder of NFIC is an existing stockholder of the
Company, and is bound by the existing subscription agreement
between such stockholder and the Company (the Existing
Subscription Agreement). The distribution of the Acquisition
Shares to each stockholder of NFIC to the Agreement will be
subject to an agreement by each stockholder that, in respect of
such Acquisition Shares, such stockholder is subject to the
restrictions of, and entitled to the benefits of, the Existing
Subscription Agreement.
The net asset value of NFIC will be the value of its assets, less
its liabilities, computed as of the business day immediately
prior to the Closing Date or such other time as may be mutually
agreed upon by the parties (such time of valuation, the Valuation
Time). The net asset value of NFIC and the Acquisition Shares
shall be determined by using the NFICs and the Companys
respective valuation procedures (which are identical) or such
other valuation procedures as shall be mutually agreed upon by
the parties.
Under the Agreement, NFIC will declare, prior to the Valuation
Time, a dividend or dividends that will satisfy the annual
distribution requirement necessary for NFIC to qualify as a
regulated investment company (RIC) for U.S. federal income tax
purposes and avoid the imposition of excise tax (such
dividend(s), the RIC Dividends). The RIC Dividends shall be
distributed to the stockholders of NFIC prior to Closing.
The Agreement contains (a)customary representations and
warranties made by each party to the other party, and
(b)customary covenants and agreements, including: (i)a covenant
by NFIC to assist the Company in obtaining such information as it
reasonably requests concerning the beneficial ownership of NFICs
common stock; (ii)a covenant by each party to cooperate in the
preparation of the proxy materials to be filed in connection with
the Merger; and (iii)a covenant by each party to take actions
reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by the Agreement.
The Closing of the Merger is subject to certain conditions, among
others: (i)the Agreement shall have been approved by the
stockholders of a majority of the outstanding stock of NFIC;
(ii)the absence of any injunctions, proceedings and
investigations seeking to restrain or prohibit, or obtain damages
or other relief in connection with, the Agreement or the Merger;
(iii)all governmental approvals or filings required for the
consummation of the Merger shall have been obtained or made, if
any; (iv)the RIC Dividends shall have been declared prior to the
Valuation Time and distributed to the stockholders of NFIC prior
to Closing; (v)NFIC shall have provided the Company a list of all
of its portfolio securities and investments; and (vi)the
representations and warranties of each party contained in the
Agreement shall be true and correct in all material respects as
of the date of the Agreement and as of the Closing and each party
shall have complied with the covenants set forth in the Agreement
in all material respects.
The parties may terminate the Agreement by mutual consent. In
addition, either party may terminate the Agreement at any time
before Closing if: (i)the non-terminating party breaches any
representation or warranty or other provision of the Agreement,
and such breach is not cured within 10 days of the breach and
prior to the Closing; (ii)any condition precedent to such partys
obligations to complete the Merger has not been met or waived and
it reasonably appears that it will not or cannot be met; or
(iii)such partys board of directors determines that the
consummation of the Merger is not in the best interests of such
party. In the event that the Agreement is terminated in
accordance with its terms, there will be no liability for damages
on the part of the Company or NFIC, except in the case of a
partys willful default of its obligations under the Agreement.
The representations, warranties, covenants and agreements
contained in the Agreement have been made solely for the purposes
of the Agreement and as of specific dates and solely for the
benefit of parties to the Agreement and (i)are not intended as
statements of fact, but rather as a way of allocating the risk
between the parties in the event the statements therein prove to
be inaccurate; (ii)in many cases are subject to important
qualifications and limitations, including certain confidential
disclosures that were made between the parties in connection with
the negotiation of the Agreement, which disclosures are not
reflected in the Agreement itself; (iii)may only be true as of a
given date; and (iv)may apply standards of materiality in a way
that is different from what may be viewed as material by an
investor or a stockholder. Accordingly, investors and
stockholders should not rely on the representations, warranties,
covenants and agreements or any descriptions thereof as
characterizations of the actual state of facts or condition of
the Company, NFIC or any of their respective subsidiaries or
affiliates. The representations and warranties and other
provisions of the Agreement should not be read alone, but instead
should be read together with the other information concerning the
parties that each party files in reports and statements with the
Securities and Exchange Commission (the SEC).
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE
SEC
This communication is being made in respect of the proposed
Merger between the Company and NFIC. In connection with the
proposed Merger, NFIC plans to file with the SEC a definitive
proxy statement on Schedule 14A that also constitutes a private
placement memorandum relating to the distribution by the Company
of the Acquisition Shares to the stockholders of NFIC (the Proxy
Statement/Private Placement Memorandum). The definitive Proxy
Statement/Private Placement Memorandum will be mailed to the
stockholders of NFIC. INVESTORS AND SECURITY HOLDERS OF THE
COMPANY ARE URGED TO READ THE PROXY STATEMENT/PRIVATE PLACEMENT
MEMORANDUM AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN
THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER.
Investors and security holders will be able to obtain free copies
of the Proxy Statement/Private Placement Memorandum (when
available) and other documents filed with the SEC by each of the
Company and NFIC through the web site maintained by the SEC at
www.sec.gov.
PROXY SOLICITATION
The Company, NFIC and their respective directors, executive
officers and certain other members of management may be
participants in the solicitation of proxies in respect of the
stockholders of NFIC in favor of the Merger. Information
regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the stockholders
of NFIC in connection with the proposed Merger will be set forth
in the Proxy Statement/Private Placement Memorandum when it is
filed with the SEC. You can find information about the Companys
executive officers and directors in its definitive proxy
statement filed with the SEC on March31, 2017. Information
regarding NFICs directors and executive officers is contained in
NFICs Form 10-K/A filed with the SEC on May1, 2017. You can
obtain free copies of these documents in the manner set forth
above.
Item3.02. Unregistered Sales of Equity
Securities
(i) Issuance of Acquisition Shares
The information included under Item 1.01 above is incorporated by
reference into this Item 3.02.
Under the terms of the Agreement, upon closing of the Merger, the
Company will pay an aggregate amount of consideration equal to
the net asset value of NFIC as of the Valuation Time for all of
the outstanding common stock of NFIC. to the Agreement, all or a
portion of the consideration will be payable in Acquisition
Shares. Subject to the completion of the Merger, the Company will
file an 8-K after the Closing to include the aggregate amount and
form of consideration paid by the Company and any other
information required by Item 3.02 that is not currently
determinable.
The issuance of the Acquisition Shares to the Agreement is exempt
from the registration requirements of the Securities Act of 1933,
as amended, to Section4(2) thereof and Regulation D and
Regulation S thereunder.
(ii) Issuance of Common Stock
On May5, 2017, the Company delivered a capital drawdown notice to
its investors relating to the issuance of 2,141,417 shares of the
Companys common stock, par value $0.01 per share (the Common
Stock), for an aggregate offering price of approximately
$39.5million. The shares are expected to be issued on or around
May19, 2017.
The issuance of Common Stock is being made to subscription
agreements (Subscription Agreement) entered into by the Company
and its investors. Under the terms of the Subscription Agreement,
investors are required to fund drawdowns to purchase shares of
Common Stock up to the amount of their respective capital
commitments on an as-needed basis with a minimum of 10 business
days prior notice to investors.
The issuance and sale of the Common Stock is exempt from the
registration requirements of the Securities Act of 1933, as
amended, to Section4(2) thereof and Regulation D and Regulation S
thereunder.
Item9.01 Financial Statements and Exhibits
|
ExhibitNo. |
Description |
|
| 2.1 |
Agreement and Plan of Merger by and between TCG BDC, Inc. and NF Investment Corp., dated as of May3, 2017.(1) |
| (1) |
Incorporated by reference to Schedule 14A filed by NFIC on May5, 2017 (File No.814-01004) |
TCG BDC, Inc. (LON:TCG) Recent Trading Information
TCG BDC, Inc. (LON:TCG) closed its last trading session at with 4,140,918 shares trading hands.