Key Takeaways
- • BCP Investment Corporation (NASDAQ: BCIC) agreed to acquire Investcorp Credit Management BDC (NASDAQ: ICMB) at 90% of net asset value, valuing ICMB at roughly $1.38 per share, a 127% premium to its $0.61 close on Nov. 9.
- • Consideration is about 0.172 BCP shares plus roughly $0.26 in cash per ICMB share, or $2.49 in total at BCP's September 30 NAV; shares above 19.99% of BCP's pre-closing count would be settled in cash.
- • The deal is BCP's fifth BDC acquisition since 2019 and follows Ares Capital's roughly $2.6 billion purchase of MidCap Financial Investment Corporation in late October.
- • BCP's Q3 2026 NAV per share fell 9.4% to $13.13 and net investment income fell to $0.37 from $0.45; BCP shares dropped about 15.5% while ICMB rose about 71%.
- • Management will slow new lending and direct repayments first to a $10 million buyback, then to debt reduction, before new originations; closing is expected in Q1 2027.
Summary
BCP Investment Corporation agreed to absorb Investcorp Credit Management BDC in an all-stock-and-cash transaction that values the smaller lender at 90% of its net asset value. The deal was disclosed on Nov. 11 and discussed on a joint earnings call the following day. It is the second BDC combination announced in barely more than two weeks and follows Ares Capital's agreement in late October to acquire Apollo-affiliated MidCap Financial Investment Corporation in a stock-and-cash transaction with an enterprise value of about $2.6 billion. According to the companies, the deal is BCP's fifth acquisition since BC Partners took over the company in 2019, following OHA Investment Corporation (2019), Garrison Capital (2020), Harvest Capital Credit (2021) and Logan Ridge Financial Corporation (2025).
Investcorp CEO Suhail Sheikh said ICMB's size and scale had been challenging to navigate. The board's special committee hired Houlihan Lokey in April and contacted a broad field of potential counterparties. Sheikh said the combination gives ICMB holders a larger, more diversified and more liquid company with a lower expense ratio and a regular monthly distribution, which ICMB suspended earlier this year. Investcorp, Stifel and ICMB's directors and officers together control about 41% of ICMB shares and have agreed to vote in favor, which BCP said raises certainty of closing.
BCP's third-quarter results showed pressure on the buyer. Total investment income fell to $13.9 million from $15.2 million, and net investment income dropped to $4.6 million, or $0.37 per share, from $0.45. NAV fell to $162.7 million, or $13.13 per share, from $14.49, after $17.5 million in net realized and unrealized losses. The asset coverage ratio declined to 157% from 162%. Non-accruals were 2.8% of fair value and 6.0% of amortized cost. The weighted average portfolio yield was 12.1%. Investors reacted sharply: ICMB rose about 71% through Thursday's close, while BCP fell about 15.5%. Bain Capital Specialty Finance, by comparison, reported NAV of $16.49 and held its quarterly dividend at 42 cents.
BCP CEO Ted Goldthorpe said the company will not chase size for its own sake, but that a larger equity base spreads fixed public-company costs and should improve liquidity. ICMB's portfolio is about 82% first-lien senior secured loans across roughly 28 companies at fair value, and BCP plans to monetize liquid positions and work through a handful of restructured credits. On the liability side, BCP expects to repay ICMB's revolver and redeem its 2029 notes around closing.
BCP management plans to slow new lending while BCP shares trade well below NAV. Repayment and sale proceeds will go first to open-market buybacks under a $10 million authorization running through March 2027, then to debt reduction toward a 1.25 to 1.4 times leverage target, and only then to new originations. Goldthorpe said, "It's not a change to our investment strategy," calling the move "a judgment that with our stock where it is today, the best risk-adjusted use of each incremental dollar of our stockholders' capital is to buy back stock at a discount and delever the balance sheet." The companies expect the transaction to be accretive to NAV per share at closing and to earnings over time, with the deal expected to close in the first quarter of 2027.
Investcorp CEO Suhail Sheikh said ICMB's size and scale had been challenging to navigate. The board's special committee hired Houlihan Lokey in April and contacted a broad field of potential counterparties. Sheikh said the combination gives ICMB holders a larger, more diversified and more liquid company with a lower expense ratio and a regular monthly distribution, which ICMB suspended earlier this year. Investcorp, Stifel and ICMB's directors and officers together control about 41% of ICMB shares and have agreed to vote in favor, which BCP said raises certainty of closing.
BCP's third-quarter results showed pressure on the buyer. Total investment income fell to $13.9 million from $15.2 million, and net investment income dropped to $4.6 million, or $0.37 per share, from $0.45. NAV fell to $162.7 million, or $13.13 per share, from $14.49, after $17.5 million in net realized and unrealized losses. The asset coverage ratio declined to 157% from 162%. Non-accruals were 2.8% of fair value and 6.0% of amortized cost. The weighted average portfolio yield was 12.1%. Investors reacted sharply: ICMB rose about 71% through Thursday's close, while BCP fell about 15.5%. Bain Capital Specialty Finance, by comparison, reported NAV of $16.49 and held its quarterly dividend at 42 cents.
BCP CEO Ted Goldthorpe said the company will not chase size for its own sake, but that a larger equity base spreads fixed public-company costs and should improve liquidity. ICMB's portfolio is about 82% first-lien senior secured loans across roughly 28 companies at fair value, and BCP plans to monetize liquid positions and work through a handful of restructured credits. On the liability side, BCP expects to repay ICMB's revolver and redeem its 2029 notes around closing.
BCP management plans to slow new lending while BCP shares trade well below NAV. Repayment and sale proceeds will go first to open-market buybacks under a $10 million authorization running through March 2027, then to debt reduction toward a 1.25 to 1.4 times leverage target, and only then to new originations. Goldthorpe said, "It's not a change to our investment strategy," calling the move "a judgment that with our stock where it is today, the best risk-adjusted use of each incremental dollar of our stockholders' capital is to buy back stock at a discount and delever the balance sheet." The companies expect the transaction to be accretive to NAV per share at closing and to earnings over time, with the deal expected to close in the first quarter of 2027.
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