FUNDRAISING NEWS | November 01, 2024
The credit arm of alternative investment firm BC Partners has agreed to acquire Runway Growth Capital, an advisor to investment funds and provider of growth loans to startups, including VC-backed companies, for an undisclosed sum.
BC Partners views the move as a long-term, strategic investment for its $8B credit arm, BC Partners Credit, that will complement its existing platforms across private lending, opportunistic credit, and specialty finance. Runway Growth is a unit of publicly traded BDC Runway Growth Finance, and in the new arrangement it will continue to operate independently and serve as an adviser to its former parent and other investment funds.
Financial terms of the transaction were not disclosed, though in a separate, related announcement, Mount Logan Capital said it will acquire the remaining minority stake in Runway Growth Capital for $5M in Logan Capital common shares. Mount Logan said it expects to “benefit significantly from access to Runway’s differentiated private credit investing capabilities.”
In a news release announcing the deal, Runway founder and CEO David Spreng said the tie-up should accelerate originations within Runway’s ideal investment range of $30 to $150M and expand offerings to both target companies and sponsors “The combination will enhance our capabilities by introducing structured equity preferred investments, asset-based lending, and the ability to operate in new strategies such as equipment leasing, while strengthening our sponsor relationships through fund finance and other fund-level offerings,” he said.
Closing on the transaction is expected to occur in the fourth quarter of 2024, subject to customary conditions, including approval by Runway Growth Finance shareholders. Senior management of Runway Growth Capital has agreed to vote its shares in favor of the deal.
Oppenheimer & Co. Inc. served as financial advisor to Runway Growth Capital, and Wachtell, Lipton, Rosen & Katz provided legal counsel. Eversheds Sutherland (US) LLP served as legal counsel to the independent directors of Runway Growth Finance. Simpson Thacher & Bartlett provided legal counsel to BC Partners, and Wildeboer Dellelce LLP acted as Canadian legal counsel to Mount Logan.
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