Prospect Capital Corporation (NASDAQ: PSEC) announced today that Prospect has sold its interests in Harbortouch Payments LLC to Searchlight Capital Partners, a private investment firm with offices in North America and Europe.
Harbortouch is a leading provider of integrated payment processing and point-of-sale ("POS") systems to small and medium sized merchant customers in the United States. The transaction is expected to result in a gross internal rate of return of 14% and cash-on-cash return of 1.3x across all tranches of Prospect's invested capital over a holding period of less than three years. Prospect expects to receive $328.0 million in proceeds and fees from the sale (including escrowed amounts). As part of the transaction, Prospect has invested $27.5 million in newly issued senior secured second-lien debt into Harbortouch.
"Prospect's sale of Harbortouch adds another cash realization to 148 such exits in Prospect Capital's track record," said Jim Clippard of Prospect Capital Management L.P. "The Harbortouch investment demonstrates the full spectrum of financing roles offered by Prospect, first as a one-stop lender, then more recently as a one-stop majority owner, and now as a non-control junior capital provider. With ample liquidity for new investments, Prospect Capital is seeking new non-control and control investments with a yield-orientation across all industries."
"We appreciate our strategic and financial relationship with Prospect, which was critical to helping Harbortouch expand into the organization that we are today," said Jared Isaacman, founder and CEO of Harbortouch. "We look forward to the future as we continue to grow and improve our platform of merchant payment services."
Goldman, Sachs & Co. acted as financial advisor to Harbortouch for the sale.
ABOUT PROSPECT CAPITAL CORPORATION
Prospect Capital Corporation (www.prospectstreet.com) is a business development company that focuses on lending to and investing in private businesses. Prospect's investment objective is to generate both current income and long-term capital appreciation through debt and equity investments.
