Runway Growth Acquires SWK Holdings in Major Merger Deal
Runway Growth Announces Acquisition of SWK Holdings
Runway Growth Finance Corp. (NASDAQ: RWAY) has made a significant move by announcing its acquisition of SWK Holdings Corporation (NASDAQ: SWKH). This strategic deal, valued at around $220 million, reflects Runway's ambition to enhance its investment portfolio.
Details of the Acquisition Deal
The acquisition will be structured as a NAV-for-NAV (Net Asset Value) merger. Notably, the total purchase price will incorporate SWK’s financials as of June 30, 2025, including additional anticipated transaction costs.
Components of the Deal
Among the features of the deal is a stock portion that consists of approximately $75.5 million in Runway Growth shares, calculated based on the closing NAV per share. Moreover, around $145 million in cash will be included, with its final amount determined 48 hours prior to the completion of the merger.
Financial Contributions and Benefits
Furthermore, Runway Growth Capital LLC, which serves as the external investment adviser to Runway Growth, is set to contribute $9 million cash specifically for distribution to SHK shareholders, adding value to the transaction.
Expected Financial Impact
Runway Growth anticipates that this acquisition will yield mid-single-digit net investment income (NII) accretion, a welcomed boost for their financial performance.
SWK Holdings' Portfolio Overview
SWK’s portfolio consists of 22 companies, with an estimated fair value of about $242 million, as per the evaluations from Runway Growth effective August 15, 2025. This robust portfolio enriches Runway’s assets and overall market presence.
Strategic Growth Insights from Leadership
David Spreng, the Founder and CEO of Runway Growth, stated, "This transaction significantly furthers our strategy to diversify and optimize our portfolio by incorporating SWK’s high-quality investments across vital sectors such as healthcare and life sciences.”
The Future of Runway Growth
Looking forward, with the backing of BC Partners Advisors L.P., Runway is committed to pursuing growth through both organic and inorganic strategies. The company aims to function as a permanent capital vehicle, underlined by the impressive $10 billion BC Partners Credit platform.
Strengthening Financial Position
As of the last report, June 30, 2025, Runway had a noteworthy liquidity status with approximately $297 million available, comprising unrestricted cash and cash equivalents valued at $6 million. This solid foundation positions them well for the upcoming merger.
Market Reaction
As the news of the acquisition broke, shares of SWK Holdings surged, with an increase of 20.76% to reach a trading price of $17.39 in premarket activity.
Frequently Asked Questions
What is the value of the acquisition deal?
The acquisition of SWK Holdings Corporation by Runway Growth Finance Corp is valued at approximately $220 million.
How will the acquisition be structured?
The acquisition is set to be executed as a NAV-for-NAV merger, based on financial evaluations as of June 30, 2025.
What components are included in the acquisition price?
The acquisition price consists of a stock component of about $75.5 million and cash of roughly $145 million.
Who is contributing additional funds to the shareholders?
Runway Growth Capital LLC will contribute an additional $9 million in cash for distribution to SWK shareholders.
What impact is expected from the acquisition?
The acquisition is expected to deliver mid-single-digit NII accretion, positively affecting Runway's financial performance.
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