Golub Capital BDC, Inc. Announces Merger Agreement With Golub Capital BDC 3, Inc. - Seite 2

The combined company will have incremental investment capacity as financial leverage at closing on a pro forma basis as of September 30, 2023 is expected to decrease from GBDC’s stand-alone GAAP leverage of 1.24x to approximately 1.10x.

Additionally, the exchange ratio structure offers the potential for further accretion to GBDC’s NAV per share if GBDC is trading at a premium to NAV when the merger closes (see section below under the title “Exchange Ratio”).

Based on the earnings power of the Company and the new incentive fee rate, on January 16, 2024, GBDC’s board of directors increased GBDC’s quarterly base distribution by over 5% and declared a quarterly distribution of $0.39 per share, which is payable on March 29, 2024, to stockholders of record as of March 1, 2024. GBDC’s Board expects to continue to evaluate the potential for supplemental distributions under its quarterly variable supplemental distribution framework, which was introduced in fiscal year 2023.

GBDC’s Board has also announced its intention to declare additional special distributions totaling $0.15 per share, to be distributed in three consecutive quarterly payments of $0.05 per share per quarter, with the record date of the first special distribution expected to occur shortly after the closing of the proposed merger.²

David B. Golub, CEO of GBDC, said, “We believe the proposed merger with GBDC 3 is a win-win-win—good for GBDC stockholders, good for GBDC 3 stockholders and good for GBDC. We’re pleased to announce the proposed reduction of GBDC’s incentive fee rate to 15.0% in connection with the proposed merger, another milestone in GBDC’s history of raising the bar for shareholder alignment. GBDC’s pro forma fee structure positions it to provide market-leading returns across different economic and interest rate environments while keeping its investment strategy focused at the top of the capital structure (first lien, first out senior secured sponsor backed floating rate loan investment strategy). We believe this will be a unique differentiator especially in the context of GBDC’s meaningfully increased scale post-merger.”

The combined company will remain externally managed by GC Advisors and all current GBDC officers and directors will remain in their current roles. The combined company will continue to trade under the ticker GBDC on the Nasdaq Global Select Market.

Consummation of the proposed merger is subject to GBDC and GBDC 3 stockholder approvals, customary regulatory approvals and other closing conditions. Assuming satisfaction of these conditions, the transaction is expected to close in the second calendar quarter of 2024.