Shareholders of Farmington-based Horizon Technology Finance Corp. have voted to approve the company’s merger with Monroe Capital Corp., clearing a major hurdle for a deal that will consolidate two lenders already under the same management umbrella into a single, larger specialty finance company.
Shareholders of Farmington-based Horizon Technology Finance Corp. have voted to approve the company’s merger with Monroe Capital Corp., clearing a major hurdle for a deal that will consolidate two lenders already under the same management umbrella into a single, larger specialty finance company.
The vote took place at a special meeting March 13, with more than 83% of voting Horizon shareholders supporting the issuance of new shares to complete the deal, the company said in filings with the U.S. Securities and Exchange Commission. Monroe Capital shareholders separately approved the merger and a related asset sale with more than 88% support.
The companies said they expect the deal to close within 30 days.
“We appreciate our shareholders’ strong approval, which marks an important step forward as we prepare for the next phase of Horizon’s growth,” said Mike Balkin, CEO of Horizon Technology Finance. “Once the merger is completed, we expect the combined company will strengthen our position in the venture lending market by increasing our scale, enhancing our earnings potential, and expanding our capacity to support innovative, high growth companies.”
Horizon specializes in making venture loans to startup and growth-stage companies in technology, health care and clean energy. Its investment adviser has been owned by Monroe, a Chicago-based asset manager with about $24 billion in assets under management, since 2023.
Under the deal, Monroe Capital Corp. will merge into Horizon, which will survive as a public company and continue trading on the Nasdaq under the ticker HRZN.
To help secure shareholder support ahead of the vote, Horizon’s board
announced last week that it planned to use $27.6 million in accumulated earnings to pay supplemental monthly distributions to shareholders of the combined company for two quarters after the merger closes. The company estimated the extra payments would amount to at least 2 to 4 cents per share per month on top of its regular dividend.
Horizon’s investment adviser, Horizon Technology Finance Management LLC, has also agreed to waive $4 million in management and incentive fees over the first four full fiscal quarters after the merger closes.
The vote came as Horizon worked to resolve three shareholder lawsuits seeking to block the transaction. Two stockholders filed separate complaints in New York County Supreme Court in February, and a third was filed in January in Delaware.
