Horizon Technology Finance Closes Monroe Capital Merger
Horizon Technology Finance Corporation has completed its merger with Monroe Capital Corporation, forming a combined business development company with approximately $471.7 million in net assets and enhancing its position in venture lending to technology and life sciences companies.
Under the agreement, Monroe Capital Corporation merged into Horizon, with Horizon issuing approximately 20.4 million shares at an exchange ratio of 0.9402. Legacy Horizon shareholders retain 70.14% ownership of the combined entity. The transaction also delivered roughly $141.1 million in cash, which Horizon plans to use for debt repayment and new loan originations.
“By successfully executing on our growth strategy, we believe we will drive long-term value creation for our shareholders, while we continue to be a leading financial partner to the innovation economy,” said CEO Mike Balkin.
The merger strengthens Horizon’s relationship with Monroe Capital, which oversees approximately $24 billion in assets and aims to scale the combined platform further.
Horizon has remained active in venture lending, recently providing a $40 million facility to Hyperfine and committing up to $50 million to Pelthos Therapeutics. The company expects the added capital base to support larger transactions and increased deal flow.
Former Monroe shareholders will receive a final $0.60 per share cash distribution tied to asset sales completed prior to closing. Horizon’s board also plans to utilize $27.6 million in undistributed taxable income to supplement distributions over the next two quarters.
Additionally, Horizon’s external manager agreed to waive up to $4 million in fees post-close, while the company reaffirmed its $10 million share repurchase program, reinforcing a focus on shareholder returns.
Oppenheimer & Co. advised Horizon’s special committee, with Blank Rome serving as legal counsel. Houlihan Lokey advised Monroe Capital Corporation’s special committee, with Nelson Mullins Riley & Scarborough as legal counsel. Dechert served as legal counsel to Monroe Capital BDC Advisors and Horizon Technology Finance Management.