BDCA acquires controlling interest in Siena Capital Finance

The BDC acquired the majority stake from Solaia Capital Advisors, which will maintain a minority stake.

Business Development Corporation of America (BDCA) has acquired an asset-based lending company to help expand its product offerings.

New York-based BDCA, a non-traded business development company that is affiliated with Benefit Street Partners, announced on Friday that it had taken a controlling interest into Siena Capital Finance. Siena will operate as an independent portfolio company of the BDC and will retain its management team.

That Siena focuses on ABLs company attracted BDCA, which focuses on cashflow loans, to the entity, Richard Byrne, the president of Benefit Street Partners and BDCA’s chief executive, told Private Debt Investor.

Richard Byrne, President of Benefit Street Partners, and CEO of BDCA.

“A lot of companies have both,” he said in reference to both asset-based and cashflow lending products. “It’s a nice complement with what we have. It enables us to be a more complete solutions provider when we talk to companies.”

Byrne said the firm looked for an ABL platform for several years and were impressed by Siena’s track record and management team. Siena has underwritten more than 100 credit transactions worth more than $1 billion since its inception in 2012.

“At the end of the day it really comes down to the quality of the team,” Byrne said. “The best team we had come across already existed. If we were able to assemble a team of this quality, it would be harder to build obviously [than acquiring an existing ABL firm].”

Byrne added that Siena, which will be a portfolio company of BDCA, allows the buyer a more diverse set of products and will be able to offer a “broader suite of solutions” across the two platforms.

“An asset-based lending business of this size fits well in a BDC,” Byrne said. “There are several other BDCs that own asset-based lenders.”

Siena deploys loans sized between $3 million and $30 million. They offer working capital loans, leveraged and management buyout products, turnaround and restructuring products, turnaround and restructuring solutions, growth financing, DIP financing and exit financing.

Siena was unable to be reached for comment by press time.

Siena was previously a wholly-owned entity of Solaia Capital Advisors, which retained a “meaningful stake” in the company, and may collaborate through BDCA in the future, according to a statement. Michael Carrazza, a managing partner and CEO of Solaia, said the firm sold off the majority of their ownership because of the company’s success.

“It has grown so steadily and successfully,” Carrazza said. “This is an opportune time to be with BDCA, a much larger partner that can bring it to its next level.”

Solaia Capital is a private markets investment firm that acquires and invests in mid-market companies. Siena Capital Finance is an independent commercial finance company that was founded in 2012, by former members of Burdale Capital finance and was backed by Solaia Capital Advisors.

BDCA is backed by Benefit Street Partners. The vehicle has $2.67 billion in total assets. Benefit Street Partners is a credit-focused alternative asset manager backed by Franklin Templeton Investments. Benefit Street Partners has more than $26 billion in assets under management.