Prospect Capital Invests $25.2 Million to Recapitalize Nationwide Acceptance
NEW YORK, NY -- (Marketwire) -- 02/04/13 -- Prospect Capital
Corporation (NASDAQ: PSEC) ("Prospect") announced today that Prospect
has funded a recapitalization of Nationwide Acceptance Corporation
("Nationwide") with $25.2 million of combined debt and equity
Founded in 1954, Nationwide is a specialty finance business based in
Chicago, Illinois. Nationwide operates in 22 states primarily as an
indirect lender in the consumer auto loan business, where it
purchases loans originated by the more than 800 active used car
dealers it covers. In the past year, Nationwide has financed the
purchase of more than 7,000 automobiles. In addition, Nationwide
operates in Illinois a small non-auto lending business making loans
directly to consumers. Nationwide employs more than 120 people and
has an aggregate loan portfolio in excess of $100 million.
Led by CEO Martin Less, senior management of Nationwide invested
alongside Prospect and owns, directly and through various incentive
plans, approximately 6.2% of the fully-diluted economic interests in
Nationwide. Prospect is the controlling shareholder of Nationwide.
Wells Fargo provided a $75.0 million revolving credit facility.
Prospect expects Nationwide to pay out substantially all of its
income in the form of dividends on a go-forward basis, providing for
an attractive current yield to Prospect and to Nationwide's
management owners. Prospect structured the acquisition of Nationwide
using tax-advantaged limited liability companies.
Nationwide has enjoyed multi-decade success due to several key
factors, including a broad-based dealer origination network, a
rigorous and consistent new loan underwriting process, and an intense
commitment to monitoring and collecting existing loans. Because of
these strengths, Nationwide has generated consistent profitability
and has grown its asset base during the past several years.
"We are pleased to be partnering with the Nationwide management team
and look forward to supporting continued profitable growth, including
acquisitions, for the business," said Ted Fowler, a Managing Director
of Prospect Capital Management LLC.
"Prospect has worked extensively to understand the auto finance
industry and Nationwide's long-term track record," said Martin Less,
CEO of Nationwide. "Leveraging our broad footprint and the capital
backing that Prospect provides, we anticipate continuing to deliver
profitable growth by expanding our business in current states as well
as new expansion states."
Milestone Advisors, LLC (now part of Houlihan Lokey) served as
exclusive financial advisor to Nationwide on the transaction.
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com) is a closed-end
investment company that lends to and invests in private and microcap
public businesses. Prospect's investment objective is to generate
both current income and long-term capital appreciation through debt
and equity investments.
Prospect has elected to be treated as a business development company
under the Investment Company Act of 1940 ("1940 Act"). Prospect is
required to comply with a series of regulatory requirements under the
1940 Act as well as applicable NASDAQ, federal and state rules and
regulations. Prospect has elected to be treated as a regulated
investment company under the Internal Revenue Code of 1986. Failure
to comply with any of the laws and regulations that apply to Prospect
could have an adverse effect on Prospect and its shareholders.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
whose safe harbor for forward-looking statements does not apply to
business development companies. Any such statements, other than
statements of historical fact, are highly likely to be affected by
other unknowable future events and conditions, including elements of
the future that are or are not under Prospect's control, and that
Prospect may or may not have considered; accordingly, such statements
cannot be guarantees or assurances of any aspect of future
performance. Actual developments and results are highly likely to
vary materially from any forward-looking statements. Such statements
speak only as of the time when made, and Prospect undertakes no
obligation to update any such statement now or in the future.
For further information, contact:
President and Chief Operating Officer
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