On Wednesday, BlackRock TCP Capital Corp . (NASDAQ: NASDAQ:TCPC) and BlackRock Capital Investment (NASDAQ:BKCC) Corporation (NASDAQ: BKCC) entered into a definitive merger agreement, according to a joint statement by the companies. Following the merger, the surviving entity will continue as a subsidiary of TCPC and will still trade on the Nasdaq Global Select Market under the ticker symbol "TCPC".
The merger agreement stipulates that BCIC will merge with and into Project Spurs Merger Sub, LLC, a wholly-owned indirect subsidiary of TCPC. The boards of directors of both BCIC and TCPC have approved this agreement based on the recommendations of their respective special committees, comprised solely of independent directors. Both parties intend for the merger to be treated as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986.
The merger consideration outlines that each share of BCIC common stock will be converted into TCPC common stock equivalent to an exchange ratio, plus any cash in lieu of fractional shares. This exchange ratio will be calculated based on net asset values (NAV) of both BCIC and TCPC, determined no earlier than 48 hours prior to the effective time of the merger.
The agreement also contains customary representations, warranties, and covenants from BCIC, TCPC, BlackRock (NYSE:BLK) Capital Investment Advisors, LLC (BCIA), and Tennenbaum Capital Partners, LLC (TCP). These include covenants relating to the operation of BCIC's and TCPC's businesses during the period leading up to the closing of the merger.
As part of the agreement, BCIC and TCPC have agreed to convene and hold stockholder meetings to obtain necessary approvals from their respective shareholders. The boards of directors for both BCIC and TCPC will recommend that their shareholders approve the proposals, subject to certain exceptions.
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