Logan Ridge Finance (LRFC), a Nasdaq-listed business development company, has secured shareholder approval for its previously announced merger with Portman Ridge Finance (PTMN), an investment company.
At a special meeting, approximately 89.4% of Logan Ridge shareholders backed the merger proposition.
Meanwhile, the special meeting for Portman Ridge shareholders is postponed until 27 June 2025, to provide extra time for considering the issuance of new common stock related to the merger. Portman Ridge is also listed on Nasdaq.
If approved by Portman Ridge shareholders and upon meeting standard closing conditions, the merger is anticipated to be finalised soon after the vote.
Logan Ridge is focused on investing in first lien loans and equity securities for lower middle-market firms. The company’s merger with Portman Ridge is expected to enhance the latter’s market presence.
The merger promises an increase in trading volume and liquidity, reduced operating costs, and access to diverse financing sources at more competitive rates. The combined enterprise will be managed externally by Sierra Crest Investment Management and is projected to possess over $600m in total assets with a net asset value of about $270m.
The merger will result in a significant portfolio overlap between Logan Ridge and Portman Ridge due to their shared investment strategy under the BC Partners Credit Platform.
Since July 2021, when Mount Logan Management took over as Logan Ridge’s external adviser, both companies have been receiving similar investments from BC Partners. Consequently, at least 70% of Logan Ridge’s portfolio investments are expected to be BC Partners-originated, with more than 60% overlapping with Portman Ridge’s assets.
Logan Ridge Finance and Portman Ridge president and CEO and BC Partners credit platform head Ted Goldthorpe said: “We’re grateful to our shareholders for their strong support of this merger with Portman Ridge.
“Their vote of confidence reflects the strategic and financial merits of the transaction, as we believe the combined company will benefit from greater scale, enhanced diversification, and improved access to capital, positioning it well to generate long-term value for shareholders.”
As part of the merger agreement, Logan Ridge shareholders will obtain 1.5 shares of newly issued Portman Ridge common stock for each Logan Ridge share held.
This fixed exchange ratio values Logan Ridge shares at $25.02 each, reflecting a 4% premium over its closing price on 24 January 2025, and a 17% premium compared to its 11 September 2024 closing price.
