Closed total new debt and equity commitments of $190.7 million to
twelve (12) companies including eight (8) new and four (4) existing
portfolio companies for Q1 2017
Unscheduled principal repayments "early pay-offs" of $100.3 million
for Q1 2017
Six (6) Hercules portfolio companies currently in IPO Registration
PALO ALTO, Calif.--(BUSINESS WIRE)--
Capital, Inc. (NYSE:HTGC) ("Hercules" or the "Company"), the leading
specialty finance company to innovative venture growth, pre-IPO and M&A
stage companies backed by leading venture capital firms, today provided
its interim portfolio update for the first quarter 2017.
"Our first quarter 2017 portfolio activity reflects our slow and steady,
conservative underwriting posture as we continue to navigate through the
uncertainty of the new administration policies to be deployed, closing
over $190 million of new commitments, adding eight new innovative
venture growth stage technology and life sciences companies, backed by
some of the leading venture capital firms in the U.S., to our
portfolio," stated Manuel A. Henriquez, chairman and chief executive
officer of Hercules. "We continue to be guardedly optimistic and well
positioned in the first half of 2017, maintaining a highly asset
sensitive balance sheet that will benefit from future rate increases,
having a strong-liquidity position to onboard investments that meet our
stringent underwriting practices and maintaining a low-leveraged balance
sheet, as we monitor the macro economic environment of the new
administration's proposed fiscal policies."
New Debt and Equity Commitments for Q1 2017:
As of March 31, 2017, Hercules has originated $190.7 million of new debt
and equity commitments to twelve (12) new and existing portfolio
Twelve (12) new commitments to innovative venture growth stage
Technology Portfolio - $73.7 Million
$40.0 million to a leading technology developer that provides advanced
text analytics, enterprise survey and customer engagement to help
hundreds of the world's leading brands understand and improve their
$15.0 million to a developer and pioneer of analytical devices for
chemical and biomolecule analysis
$15.0 million to a leading provider of on-demand project management
software for small and midsize companies
$3.7 million equity investment to a technology developer that provides
the most complete enterprise social technology in the world, designed
to help large companies collaborate across their entire organization
to create intuitive, superior customer experiences across every social
Life Sciences Portfolio - $100.0 Million
$55.0 million to a leading clinical-stage biopharmaceutical company
focused on acquiring, developing and commercializing novel
therapeutics for the treatment of dementia
$20.0 million to a biopharmaceutical company committed to the
development and commercialization of innovative new treatments for
people with serious, rare muscle diseases through the application of
adeno-associated virus (AAV) gene therapy technology
$15.0 million to a medical devices company focused on bringing
innovative, cost-effective, surgical reconstruction solutions to
surgeons, hospitals and patients
$10.0 million to a biopharmaceutical company focused on discovering
and developing drugs to improve outcomes for patients with cancer
New Commitments to Four (4) Existing Portfolio
Companies - $17.0 Million
Unscheduled Early Principal Repayments "Early Pay-Offs:"
As of March 31, 2017, Hercules received $100.3 million in unscheduled
early principal repayments "early pay-offs."
Portfolio Company IPO, M&A and Other Activity in Q1 2017:
As of March 31, 2017, Hercules held warrant and equity positions in six
(6) portfolio companies that had filed Registration Statements in
contemplation of a potential IPO, including:
Six (6) companies filed confidentially under the JOBS Act
There can be no assurances that companies that have yet to complete
their IPOs will do so.
1. In January 2017, Hercules' portfolio company Merrimack
Pharmaceuticals, Inc. (NASDAQ: MACK) announced that it had entered
into a definitive asset and sale agreement with Ipsen (Euronext: IPN;
ADR:IPSEY), a global specialty-driven pharmaceutical group committed to
discovering new solutions for targeted debilitating diseases. Merrimack
intends to use part of the proceeds to extinguish the $175.0 million in
outstanding Senior Secured Notes due in 2022. Hercules anticipates the
transaction to be completed by the end of Q1 2017, with the potential
repayment of its outstanding debt obligation to follow.
2. In February 2017, Hercules' portfolio company Jaguar Animal
Health, Inc. (NASDAQ: JAGX) entered a binding merger agreement with
Napo Pharmaceuticals, a company that focuses on the development and
commercialization of proprietary pharmaceuticals for the global
marketplace in collaboration with local partners. Subject to the
conditions to closing, the proposed merger is expected to close during
the second quarter of 2017.
3. In February 2017, Hercules' portfolio company Nasty Gal, a Los
Angeles, CA-based fashion retail website for girls that sells vintage
clothing, shoes and accessories, was acquired by Boohoo.com, a
Manchester, England-based online fashion retailer, for $20.0 million in
consideration for Nasty Gal's intellectual property assets and customer
databases. Hercules initially committed $20.0 million in venture debt
financing, and has an outstanding balance at cost on its senior secured
term loan with Nasty Gal of $13.1 million as of December 31, 2016. On
February 28, 2017, Hercules received a partial payment of $12.6 million
from the sale of Nasty Gal assets, with full repayment expected upon
close of escrow.
4. In February 2017, Hercules' portfolio company Persimmon
Technologies Corporation, a manufacturer and distributor of vacuum
robotics, entered into a definitive agreement with Sumitomo Heavy
Industries, Ltd. to be acquired in an all-cash transaction. In March
2017, the acquisition was completed. Persimmon will become a subsidiary
of Sumitomo Heavy Industries. Hercules initially committed $7.0 million
in venture debt financing in December 2015 and held warrants for 63,348
shares of Preferred Series D stock as of December 31, 2016.
5. In February 2017, Hercules portfolio company JumpStart is
actively engaged in confidential M&A activity, which if completed could
result in significant recovery of previously impaired loan. Financial
terms were not disclosed. However, M&A negotiations are subject to many
factors and hard to predict as to if or when they will be completed, if
6. In March 2017, Hercules' portfolio company Cerulean Pharma Inc.
(NASDAQ: CERU) announced it has entered into a definitive stock purchase
agreement with Daré Bioscience, a privately-held, clinical-stage
pharmaceutical company advancing products for women's reproductive
health, under which the equity holders of Daré Bioscience will become
the majority owners of Cerulean, subject to the approval by stockholders
of Cerulean. Cerulean also announced the sale of certain assets to
BlueLink Pharmaceuticals and Novartis. Cerulean also announced that, in
connection with these transactions, it is paying off its debt facility
with Hercules. Hercules initially committed $26.0 million in venture
debt financing, and had an outstanding balance at cost on it senior
secured term loan with Cerulean of $14.0 million as of December 31, 2016.
7. In March 2017, Hercules' portfolio company SOASTA, Inc.,
announced that it had entered into an agreement with Akamai
Technologies, Inc. (NASDAQ: AKAM), a leading content delivery services
provider for media and software delivery and cloud security solutions,
to be acquired in an all-cash transaction. Akamai Technologies announced
on April 7, 2017, that it had completed the acquisition. Hercules
initially committed $18.5 million in venture debt financing in August
2014, and currently holds warrants for 410,800 shares of common stock as
of December 31, 2016.
8. In November 2016, Hercules' portfolio company FanDuel Inc.
announced a merger agreement with sports technology company DraftKings,
Inc. The transaction is expected to close in 2017. Financial terms were
not disclosed. The transaction is subject to customary closing
conditions and regulatory approvals.
9. In August 2016, Hercules' portfolio company IronPlanet, a
leading online marketplace for used heavy equipment and other durable
assets, announced that it had entered into a definitive agreement with
Ritchie Bros. Auctioneers Incorporated (NYSE & TSX: RBA), the world's
largest industrial auctioneer and a leading equipment distributor, to be
acquired for approximately US $758.5 million, subject to customary
closing adjustments. Hercules initially committed $37.5 million in
venture debt financing to IronPlanet in October 2014. Hercules currently
holds warrants for 1.2 million shares of Preferred Series D stock, as of
December 31, 2016.
1. In March 2017, Hercules' portfolio company Sungevity, Inc.
announced that it had commenced voluntary Chapter 11 proceedings in the
U.S. Bankruptcy Court for the District of Delaware, in order to
facilitate a financial and corporate restructuring to strengthen their
balance sheet and recapitalize the company. During the Chapter 11
proceedings, the company expects operations to continue uninterrupted.
In connection with the restructuring process, and under Section 363 of
the Bankruptcy Code, Sungevity entered into an asset purchase agreement
with a group of investors, led by Northern Pacific Group. On April 7,
2017, the U.S. Bankruptcy Court approved Sungevity's DIP financing
facility on a final basis.
About Hercules Capital, Inc.
Hercules Capital, Inc. (NYSE: HTGC) ("Hercules") is the leading and
largest specialty finance company focused on providing senior secured
venture growth loans to high-growth, innovative venture capital-backed
companies in a broad variety of technology, life sciences and
sustainable and renewable technology industries. Since inception
(December 2003), Hercules has committed more than $6.7 billion to over
375 companies and is the lender of choice for entrepreneurs and venture
capital firms seeking growth capital financing. Companies interested in
learning more about financing opportunities should contact firstname.lastname@example.org,
or call 650.289.3060.
Hercules' common stock trades on the New York Stock Exchange under the
ticker symbol "HTGC."
In addition, Hercules has one outstanding bond issuance of 6.25%
Unsecured Notes due July 2024 (NYSE: HTGX).
This press release may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. You
should understand that under Section 27A(b)(2)(B) of the Securities Act
of 1933, as amended, and Section 21E(b)(2)(B) of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995 do
not apply to forward-looking statements made in periodic reports we file
under the Exchange Act.
The information disclosed in this press release is made as of the date
hereof and reflects Hercules most current assessment of its historical
financial performance. Actual financial results filed with the SEC may
differ from those contained herein due to timing delays between the date
of this release and confirmation of final audit results. These
forward-looking statements are not guarantees of future performance and
are subject to uncertainties and other factors that could cause actual
results to differ materially from those expressed in the forward-looking
statements including, without limitation, the risks, uncertainties,
including the uncertainties surrounding the current market volatility,
and other factors the Company identifies from time to time in its
filings with the SEC. Although Hercules believes that the assumptions on
which these forward-looking statements are based are reasonable, any of
those assumptions could prove to be inaccurate and, as a result, the
forward-looking statements based on those assumptions also could be
incorrect. You should not place undue reliance on these forward-looking
statements. The forward-looking statements contained in this release are
made as of the date hereof, and Hercules assumes no obligation to update
the forward-looking statements for subsequent events.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170417005332/en/
Hercules Capital, Inc.
Michael Hara, 650-433-5578 HT-HN
Relations and Corporate Communications
Source: Hercules Capital, Inc.
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