Solar Senior Capital has added another asset-based lender to its portfolio with acquisition of North Mill Capital, allowing the New York-based buyer to expand that platform beyond its healthcare industries offering.
Solar, a business development company providing senior secured loans to mid-market companies, invested $51 million in North Mill, which lends to small and mid-market businesses in the distribution, manufacturing and services sectors, according to a statement.
With North Mill’s book, more than 35 percent of Solar’s portfolio will be in senior secured loans collateralised in current assets. The acquired firm has underwritten more than $500 million to 150 borrowers since its founding in 2010.
In September 2013, Solar invested $33 million in Gemino Healthcare Finance, an ABL provider that specialises in healthcare lending. Gemino provides revolving lines of credit of typically $2 million-$20 million, senior secured loans and real estate loans backing skilled nursing facilities.
The North Mill deal is the latest in a string of consolidation in the mid-market lending and specialty finance spaces. Recent consolidations include Oaktree Capital Management’s $320 million acquisition of Fifth Street Asset Management’s BDCs. In addition, NewStar Financial announced plans recently to sell itself to First Eagle Management and the sale of a $2.4 billion mid-market loan portfolio to Blackstone credit arm GSO Capital Partners.
As of 30 June, Solar had an investment portfolio of $375.29 million, according to its second-quarter earnings report. Healthcare providers and services businesses were the largest investment category, making up 15.8 percent of the portfolio, while communications equipment and asset management were the second and third largest sectors at 12 percent and 11.4 percent, respectively.
Editor’s note: This story has been updated with specific information about the joint venture from a market source.