BSP set to close BDCA deal this week – exclusive

The transaction will involve appointing four new independent directors to the seller’s board.

Benefit Street Partners (BSP) is preparing to finalise yet another deal with AR Global this fall.

The New York-based credit investment firm won shareholder approval on Friday for its acquisition of Business Development Corporation of America (BDCA), according to a source familiar with the matter. The source also said the deal is scheduled to close the deal this week.

Once the companies close the deal, BSP will be the new advisor to BDCA, replacing its current advisor, which is an affiliate of AR Global. In July, BSP agreed to acquire the $2.6 billion business development company. Terms of the deal have not been disclosed. The source said as part of the transaction, a new independent director will be added to the board. 

BSP declined to comment, while a BDCA spokesman could not be reached for comment.

On 30 September, BSP and Realty Finance Trust (RFT) closed a deal that made BSP the external advisor to RFT, replacing a separate affiliate of AR Global. According to the announcement, provisions of the deal included calculating BSP’s management fee to be based on stockholders’ equity rather than assets and an annual performance fee that will be revised so it is more shareholder friendly.

BSP has also been active on the fundraising trail lately. The firm is raising a $500 million distressed funds from the New Jersey Division of Investments. As the debt investing side of Providence Equity Partners, a $47 billion private equity firm, Benefit Street itself has about $13 billion under management.

Editor's note: This story has been updated with new information about the BDCA board post-closing.