NEW YORK–(BUSINESS WIRE)–North Haven Private Income Fund LLC and SL Investment Corp., each business development companies externally managed by MS Capital Partners Adviser Inc., announced today that they entered into a merger agreement, pursuant to which PIF would acquire SLIC, subject to approval of the SLIC stockholders and customary closing conditions.
Following the Transaction, PIF is expected to have $5.0 billion of total assets at fair value and investments in approximately 269 portfolio companies, on a pro forma basis as of March 31, 2024. The Boards of Directors of both PIF and SLIC have approved the transaction with the participation throughout by, and the unanimous support of, their respective independent directors.
Under the terms of the Merger Agreement, each share of common stock, $0.001 par value per share, of SLIC (“SLIC Common Stock”) issued and outstanding immediately prior to the effective time of the merger, except for shares, if any, owned by SLIC, PIF or any of their respective consolidated subsidiaries and shares, if any, held by any person who is entitled to demand (and properly demands) appraisal of such shares, will be converted into the right to receive, in cash, the quotient of (i) the closing SLIC net asset value divided by (ii) the number of shares of SLIC Common Stock issued and outstanding immediately prior to the effective time of the merger (inclusive of shares of SLIC already held by PIF) (the “SLIC Per Share NAV”).
Key Transaction Highlights
- PIF’s Increased Scale & Portfolio Diversification. The proposed Transaction would provide PIF with the ability to grow its portfolio meaningfully with assets within its investment strategy. PIF’s investment portfolio at fair value is expected to increase by $1.1 billion, or 29%, on a pro forma basis as of March 31, 2024.
- PIF’s Acquisition of a Known, Diversified Portfolio of Assets. There is significant portfolio overlap between PIF and SLIC and PIF’s portfolio is expected to improve in terms of single name and industry diversification following the Transaction.
- PIF’s Improved Leverage & Funding Profile. The proposed Transaction is expected to increase PIF’s leverage ratio of 0.41x to 0.84x on a pro forma basis as of March 31, 2024 and is expected to result in PIF’s more efficient use of leverage, as well as reduce PIF’s cost of debt. PIF is expected to maintain significant liquidity, on a pro forma basis.
- Expected to be Accretive to PIF’s Return Profile. As a result of the increase in leverage—and reduction in the blended cost of debt—PIF’s net investment income returns could improve by ~150bps, based on results for the first quarter of 2024.
- Immediate Liquidity for SLIC Stockholders. Each share of SLIC Common Stock issued and outstanding immediately prior to the Transaction will receive an amount of cash equal to the SLIC Per Share NAV, which provides immediate liquidity and certainty of value to the SLIC stockholders.
Jeffrey Levin, President and Chief Executive Officer of PIF and SLIC, said, “We are very pleased with the performance of both funds and excited to be delivering value for the investors of both entities with this transaction. The transaction will provide PIF with even greater scale and be meaningfully accretive to PIF’s net investment income per share and will provide immediate liquidity to SLIC stockholders.”
PIF will remain externally managed by the Adviser and all current PIF officers and directors will remain in their current roles.
Consummation of the proposed Transaction is subject to SLIC stockholder approval, customary regulatory approvals and other closing conditions. Assuming satisfaction of these conditions, the Transaction is expected to close in the third calendar quarter of 2024.
Keefe, Bruyette & Woods, A Stifel Company, served as financial advisor to the special committee of the independent directors of SLIC.
About North Haven Private Income Fund, LLC
North Haven Private Income Fund, LLC is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. PIF has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. PIF is externally managed by the Adviser, an indirect, wholly owned subsidiary of Morgan Stanley. PIF is not a subsidiary of or consolidated with Morgan Stanley. For more information about North Haven Private Income Fund LLC, please visit http://www.northhavenprivateincomefund.com.
About SL Investment Corp.
SL Investment Corp. is a non-diversified, externally managed specialty finance company focused on lending to middle-market companies. SLIC has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended. SLIC is externally managed by the Adviser, an indirect, wholly owned subsidiary of Morgan Stanley. SLIC is not a subsidiary of or consolidated with Morgan Stanley.
