Year-to-Date Momentum Continues with New Originations and Closed
Commitments on Pace to Exceed 2016
Closed total new debt and equity commitments of ~$154.0 million to
seven (7) companies including five (5) new and two (2) existing
portfolio companies in Q3 2017
Closed total new debt and equity commitments of ~$552.0 million
for the first nine months of 2017
"Early loan pay-offs," or unscheduled principal repayments of
~$115.0 million, consisting of a large amount of older loans which
typically have lower call premiums, for Q3 2017
Early loan pay-offs for the first nine months of 2017 of
Seven (7) Hercules portfolio companies currently in IPO Registration
Four (4) Hercules portfolio companies completed or announced M&A
liquidity events during Q3 2017
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
announced its interim portfolio update for the third quarter 2017.
"Our team's strong origination activities, which resulted in
approximately $154.0 million in new commitments, continues to show the
strength of the Hercules Capital platform and helped offset higher than
anticipated early loan repayments in what is also typically our slowest
quarter seasonally," stated Manuel A. Henriquez, founder, chairman and
chief executive officer of Hercules. "Further, we remain steadfast in
continuing our disciplined ‘slow and steady' portfolio and earnings
growth strategy. During the third quarter, we converted a healthy amount
of our unfunded commitments, as a subset of our portfolio companies
achieved important financial and operating milestones, into new loan
growth and allowing us to modestly grow our debt investment portfolio.
Unscheduled early loan repayments continue at elevated levels, driven by
a combination of M&A activity, increased portfolio company milestone and
development achievements, and an abundance of liquidity in the broader
capital markets looking for assets and more attractive pricing."
New Debt and Equity Commitments for Q3 2017:
In the three months ended September 30, 2017, Hercules has originated
~$154.0 million of new debt and equity commitments to seven (7) new and
existing portfolio companies.
Five (5) new commitments to innovative venture growth stage companies
Technology Portfolio - $101.0 Million
$54.0 million to a developer of email marketing technologies that
offers a software that enables organizations to create, send and track
email marketing campaigns and online surveys
$30.0 million to a leading provider of affordable and interoperable
healthcare information technology solutions and services
$10.0 million to a leading technology developer of a social analytics
platform that global companies use to run brands, build businesses and
connect with consumers
$7.0 million to a developer of the largest working capital marketplace
in the world in which companies across the globe use the technology to
improve their financial position
Life Sciences Portfolio - $30.0 Million
$30.0 million to a rapidly growing and innovative population health
business operating primary care clinics focused on Medicare
Two (2) New Commitments to Existing Portfolio
Companies - $23.0 Million
$15.0 million to a leading designer and installer of residential and
commercial solar systems in Southern California
$8.0 million to a privately-held fabless semiconductor corporation
developing high-performance field programmable gate arrays (FPGAs) and
embedded FPGA IP solutions
Unscheduled Early Principal Repayments "Early Pay-Offs:"
For the three months ended September 30, 2017, Hercules received ~$115.0
million in unscheduled early principal repayments "early pay-offs."
Portfolio Company IPO, M&A and Other Activity in Q3 2017:
As of September 30, 2017, Hercules held warrant and equity positions in
seven (7) portfolio companies that had filed Registration Statements
confidentially under the JOBS Act in contemplation of a potential IPO.
There can be no assurances that companies that have yet to complete
their IPOs will do so.
In August 2017, Hercules' portfolio companies Cempra, Inc.
(NASDAQ: CEMP), a clinical-stage pharmaceutical company focused on
developing differentiated anti-infectives for acute care and community
settings to meet critical medical needs in the treatment of infectious
diseases, and Melinta Therapeutics, Inc., a privately held
company focused on discovering, developing, and commercializing novel
antibiotics to treat serious bacterial infections, announced that the
companies had entered into a definitive agreement under which Melinta
will merge with a subsidiary of Cempra. The merger is expected to
create a NASDAQ-listed company committed to discovering, developing
and commercializing important anti-infective therapies for patients
and physicians in areas of significant unmet need. The merger is
expected to close in the fourth quarter of 2017, subject to the
approval of the stockholders of each company as well as other
customary conditions. Hercules committed $40.0 million in venture debt
financing to Cempra from 2011 to 2014. Hercules initially committed
$30.0 million in venture debt financing to Melinta in December 2014
and currently holds 1,194,448 shares of Preferred Series 4 stock as of
June 30, 2017.
In August 2017, Hercules' portfolio company CashStar, Inc., a
leading provider of gift card commerce solutions at the forefront of
mobile payments and digital gifting innovation, was acquired by
Blackhawk Network, Inc., a global financial technology company and a
leader in connecting brands and people through branded value
solutions, for $175.0 million in cash. Hercules initially committed
$8.0 million in venture debt financing in June 2013, and currently
holds warrants for 727,272 shares of Preferred Series C-2 stock as of
June 30, 2017.
In September 2017, Hercules' portfolio company Cloud
Technology Partners, Inc., a born-in-the-cloud services company
with strong enterprise experience, announced that Hewlett Packard
Enterprise intends to acquire the company to accelerate IT services
growth as they transition from a traditional hardware business to a
hybrid IT strategy. Terms of the deal were not disclosed. Hercules
initially committed $14.4 million in venture debt financing in
December 2016, and currently holds warrants for 113,960 shares of
Preferred Series C stock as of June 30, 2017.
Portfolio Company Activities
In June 2017, Hercules' portfolio company AVEO Oncology
(NASDAQ: AVEO), a biopharmaceutical company dedicated to advancing a
broad portfolio of targeted therapeutics for oncology and other areas
of unmet need, announced that the company's pivotal TIVO-3 trial has
reached its enrollment target of 322 patients, more than two months
ahead of the company's initial guidance. Hercules currently holds
426,931 shares of common stock and warrants for 2,069,880 shares of
common stock as of June 30, 2017.
In September 2017, Hercules' portfolio company Insmed Incorporated
(NASDAQ: INSM), a global biopharmaceutical company focused on the
unmet needs of patients with rare diseases, announced positive
top-line results from Phase 3 CONVERT study of ALIS (Amikacin Liposome
Inhalation Suspension) in adult patients with treatment-refractory
Nontuberculous Mycobacterial (NTM) lung disease caused by
Mycobacterium Avium Complex (AVM). Hercules currently holds 70,771
shares of common stock as of June 30, 2017.
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 $6.9 billion to over
380 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/20171003005555/en/
Hercules Capital, Inc.
Michael Hara, 650-433-5578 HT-HN
Relations and Corporate Communications
Source: Hercules Capital, Inc.
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