Private credit lenders consolidate as earnings pressure builds
ICMB•BCP Investment Corporation agreed to acquire Investcorp Credit Management BDC at 90% of adjusted net asset value, as quarterly results showed earnings and asset-value pressure at some lenders. BCP’s net investment income fell to $4.6 million, and its net asset value per share dropped 9.4% to $13.13.
1. Lenders pursue scale
BCP Investment Corporation agreed to acquire Investcorp Credit Management BDC in a transaction valuing the target at 90% of adjusted net asset value. The deal, announced Wednesday, sent Investcorp shares up about 71% by Thursday’s close, while BCP shares fell about 15.5%. Using BCP’s November 9 share price, the consideration was estimated at $1.38 per Investcorp share, a 126% premium to its 61-cent closing price that day.
2. Earnings and asset values
BCP’s third-quarter net investment income fell to $4.6 million, or 37 cents per share, from $5.5 million, or 45 cents, in the preceding quarter. Total investment income declined to $13.9 million from $15.2 million as loan repayments outpaced new lending. Net asset value per share fell 9.4% to $13.13 at the end of September, and the company recorded $17.5 million in net realised and unrealised investment losses.
3. More consolidation
BCP said the acquisition, due to close in the first quarter of 2027, is expected to lift earnings through cost savings, lower financing costs and portfolio repositioning. The agreement follows Ares Capital’s deal to acquire Apollo-affiliated MidCap Financial Investment Corporation in a stock-and-cash transaction with an enterprise value of about $2.6 billion. Bain Capital Specialty Finance’s net investment income slipped to 43 cents per share from 44 cents, while its net asset value fell to $16.49 from $16.65; its dividend remained 42 cents per share.
