Nuveen Churchill Private Capital Income Fund Enters Agreement to Purchase Other Nuveen BDC Entity
Nuveen Churchill Private Capital Income Fund, or PCAP, and Nuveen Churchill Private Credit Fund, or NCPCF – both non-traded business development companies – have entered into a purchase and sale agreement unanimously approved by both BDCs’ boards of trustees. Per the agreement, NCPCF will sell to PCAP substantially all of its assets; PCAP will assume NCPCF’s liabilities; and, following the closing of the transaction, NCPCF will begin to wind down its investment operations. The transaction is subject to approval by NCPCF’s shareholders and other customary closing conditions and is anticipated in the fourth quarter of 2024.
PCAP and NCPCF are specialty finance companies focused primarily on investing in U.S. middle-market companies with $10 million to $100 million in earnings before interest, taxes depreciation and amortization.
“We are excited to announce the board approval of a strategic transaction in which PCAP will purchase the assets and liabilities of NCPCF, an affiliated BDC,” said Kenneth J. Kencel, chief executive officer of PCAP and NCPCF. “While PCAP’s investment strategy will remain unchanged, the combination will result in increased size, scale and diversification in order to continue delivering strong growth and long-term value for our shareholders.”
According to the company, the transaction is expected to lead to enhanced size, scale and portfolio diversification of PCAP through the integration of NCPCF’s portfolio. The larger scale of PCAP may improve its ability to make additional investments and gain indirect exposure to new asset classes, said the BDC, while also potentially creating synergies between existing and potential commercial finance investments, providing greater diversification of niche lending strategies.
The transaction also increases PCAP’s access to debt and equity capital and creates organizational efficiencies. PCAP said that combining PCAP and NCPCF’s investment strategies into PCAP may provide a more cohesive organizational structure and increased collaboration that may make it easier for PCAP and its portfolio companies to acquire loan portfolios during times of market dislocation. Additionally, according to the company, the integration of NCPCF’s portfolio is expected to be an efficient process, as approximately 60% of NCPCF’s portfolio assets are investments in issuers in which PCAP also holds portfolio assets.
PCAP said the transaction provides an efficient exit strategy for NCPCF by allowing NCPCF shareholders to receive cash for their investment in one lump sum, as opposed to over time).
In exchange for cash consideration paid by PCAP equal to NCPCF’s net asset value, NCPCF will sell, transfer, assign, convey and deliver to PCAP all of its assets, other than those necessary for NCPCF to carry out its wind-down and liquidation. PCAP will also assume NCPCF’s liabilities, including all indebtedness outstanding under NCPCF’s credit facility and all obligations under the documents governing NCPCF’s portfolio assets. Following the transaction, NCPCF will cease its investment operations and distribute the cash consideration and its remaining assets, if any, to its shareholders.
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