Today's Transactions:
Stellus Capital Marks Third Recent BDC IPO
Stellus and OSF Follow in Monroe Capital’s Footsteps
Stellus Capital Investment Corp. (NYSE: SCM) has begun its first day of trading, with a public offering of 8 million shares at $15 per share.
Midday trading remains flat. The shares are expected to be delivered on Nov. 13.
This is the third IPO of a business development company (BDC) in recent weeks. The announcement comes the same day as OFS Capital Corp.'s (Nasdaq: OFS) initial public offering of 6.67 million shares of common stock, also at $15.00 per share, and more than a week after Monroe Capital Corp. (Nasdaq: MRCC) closed its IPO of 5 million shares of common stock.
Like OFS and Monroe, Stellus invests in middle-market companies by infusing them with debt and equity. The Houston firm reported roughly $120 million in gross proceeds, which it plans to use for paying the outstanding balance on a bridge loan, according to a filing with the U.S. Securities and Exchange Commission.
The firm, which spun out of New York investment adviser D.E. Shaw in January, acquired an asset portfolio for $165.2 million in cash and $29.3 million in stock.
Raymond James and Stifel Nicolaus & Co. Inc. are serving as joint book-running managers, while investment advisers Robert W. Baird & Co. Inc. and Oppenheimer & Co. Inc. are serving as co-lead managers. Janney Montgomery Scott LLC and Sterne Agee & Leach Inc. are serving as co-managers.
Meanwhile, Rolling Meadows, Ill.-based OFS raised about $100 million in gross proceeds, with plans to deliver the shares by Nov. 14. Monroe, an affiliate of Chicago middle-market investment firm Monroe Capital LLC, raised about $75 million in proceeds.
For more IPO coverage from Mergers & Acquisitions, see "Apollo-Backed Realogy Trades Up 27 Percent on IPO" and "Private Equity Perspective: Will Apollo's Successful Realogy IPO Bode Well for Other PE-Backed Debuts?." Also, watch Editor-in-chief Mary Kathleen Flynn's interview with Monroe Capital managing director Thomas Aronson at themiddlemarket.com/video.
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