Sign up USA
Proactive Investors - Run By Investors For Investors

Medley Management shares rocket after it merges with Sierra Income to create business development powerhouse

Medley Capital Corp will join the new combine to create one of the largest business development companies on the NYSE
A financier
As a condition to closing the transactions, Sierra stock will be listed to trade on the New York Stock Exchange

Shares of Medley Management Inc (NYSE:MDLY) rocketed Friday after it announced it would merge with Sierra Income Corp and Medley Capital Corp (NYSE:MCC) to create one of America’s largest business development companies on the New York Stock Exchange.

Investors latched onto the news of the powerhouse in the making and sent Medley Management shares zooming 42% to US$4.90, while Medley Capital rose nearly 8% to US$3.65.

The three companies said they had entered into an agreement for Sierra to acquire Medley Management and Medley Capital. Their existing asset management businesses will operate as Sierra’s wholly-owned subsidiary.

As a condition to closing the transaction, Sierra stock will be listed to trade on the New York Stock Exchange.

“We are excited to bring together these three complementary entities to create a single, large-scale business development company and credit manager,” Medley Capital CEO Brook Taube said in a statement.

There’s been a lot of buzz about business development companies of late as they provide crucial financing to small and mid-sized businesses. BDCs are set up essentially as closed-end funds that make investments in private, or in some cases public companies, typically with lower trading volumes.

The company said the new BDC will have over US$5bn of assets under management, including US$2bn of internally managed assets. The transaction would “add scale to the BDC platform, increase operational efficiencies,” create a stronger balance sheet and improve portfolio diversification.

Medley Capital shareholders will receive 0.8050 shares of Sierra stock for each existing share they currently hold.

Similarly, Medley Management shareholders will receive 0.3836 shares of Sierra stock for each Medley Class A share, and US$3.44 per share of cash consideration and US$0.65 per share of special cash dividends. the company said.

Current Sierra shareholders will continue to own shares of Sierra common stock.

The mergers are cross-conditioned on each other and subject to approval by Sierra, Medley Management and Medley Capital shareholders. The merger is expected to close in the fourth quarter of 2018 or early next year.

Contact Uttara Choudhury at [email protected]
Follow her on Twitter: @UttaraProactive

View full MDLY profile View Profile

Medley Management Inc Timeline

Related Articles

Care worker
August 10 2018
The stock consistently trades above its net asset value per share, which could have something to do with the dividend yield of more than 6%
Russia picture
June 04 2018
The bulk of overall exposure is in credit and government bonds followed closely by equities
International currencies in bundles
September 04 2018
A number of key acquisitions and new products have attracted a raft of new customers towards the firm's platform as it seeks to challenge established forex providers

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You understand that the Company receives either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate.

You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Copyright ©, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use