Bahrain's Investcorp unit to acquire majority stake in US firm

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MANAMA: Investcorp Credit Management US, a subsidiary of Investcorp, has entered into a definitive agreement to acquire a majority ownership interest in CM Investment Partners (CMIP) through its purchase of the respective equity positions held by certain funds managed by Cyrus Capital Partners, and Stifel Venture, and newly issued interests in CMIP.

As a result of the transaction, Investcorp will become the majority owner of CMIP and Michael Mauer and Christopher Jansen, CMIP’s co-chief investment officers, will together maintain a minority ownership interest in CMIP.

Notwithstanding the sale of their respective interests in CMIP, each of Cyrus and Stifel will retain equity, representing a 44.1 per cent interest in the aggregate.

Simultaneously, CM Finance entered into a definitive stock purchase and transaction agreement with an affiliate of Investcorp, through which, Investcorp will purchase newly issued shares of CM Finance representing 5pc of total outstanding shares at a pre-determined net asset value per share, and shares of CM Finance’s common stock in open-market transactions representing 5pc of total outstanding shares.

Investcorp executive chairman Mohammed Alardhi said the acquisition of CMIP “is a strategic milestone for us as we expand our credit product offerings by entering a new and dynamic segment of the US market”.

Formed in February 2013 by Michael Mauer and Chris Jansen, CMIP is the investment adviser to CM Finance, which seeks to invest primarily in middle-market companies that have annual revenues of at least $50m and EBITDA of at least $15m.

CM Finance primarily invests in floating rate first lien, second lien and unitranche loans, but also selectively invests in mezzanine loans/structured equity and in the equity of portfolio companies through warrants and other instruments.

Investcorp co-chief executive Rishi Kapoor said, “We are seeing significant opportunities in this space and we believe that this acquisition will enable us to broaden our footprint in the US credit market and capitalise on these opportunities going forward.”

CMIP is expected to join the Investcorp platform and remain the investment adviser to CM Finance.

The transaction, which is expected to close in the third quarter of 2019, is subject to customary regulatory requirements and closing conditions.

Raymond James acted as financial adviser to Investcorp on the transaction.

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