Mount Logan Capital has entered into a definitive agreement to merge with 180 Degree Capital Corp. in an all-stock deal and create a company with an estimated pro forma equity value of US$113.6 million at closing.
The resulting entity will be a Delaware corporation operating under the name, “Mount Logan Capital Inc.” and listed on Nasdaq under the symbol, “MLCI.” Legacy Mount Logan and 180 Degree Capital will become wholly owned subsidiaries of this resulting entity. The merger is expected to close in mid-2025.
Ted Goldthorpe, chief executive and chairman of Mount Logan, will serve as the CEO of the resulting entity, which will be governed by a seven-member board of directors. The board will include Goldthorpe, four independent directors from Mount Logan, one independent director from 180 Degree Capital, and one mutually agreed-upon independent director.
Under the terms of the agreement, Mount Logan shareholders will receive proportionate ownership in the newly formed entity based on Mount Logan’s US$67.4 million transaction equity value at the time of the signing of the agreement, relative to 180 Degree Capital’s net asset value (NAV) at closing.
Based on the NAV of 180 Degree Capital as of January 15, the estimated post-merger ownership is expected to be approximately 60% for current Mount Logan shareholders and 40% for 180 Degree Capital shareholders.
The transaction is subject to customary regulatory approvals, shareholder approvals, and other closing conditions, including the effectiveness of a registration statement with the US Securities and Exchange Commission.
The transaction has received support from the shareholders of both companies. About 23% of Mount Logan shareholders and 20% of 180 Degree Capital shareholders have signed voting agreements in favor of the deal. Additionally, 9% of Mount Logan and 7% of 180 Degree Capital shareholders have provided non-binding support.
“We view the transaction as a significant milestone for both Mount Logan and 180 Degree Capital shareholders,” Goldthorpe commented. “Through the combination with 180 Degree Capital, we will have a larger balance sheet that allows us to scale through investment into other organic and inorganic growth opportunities, benefitting all key stakeholders.”
Meanwhile, Kevin Rendino, chief executive of 180 Degree Capital, highlighted the alignment of business strategies, corporate culture and future growth opportunities. He indicated that the merger would significantly enhance their capabilities in credit asset management.
Dechert LLP served as legal adviser to Mount Logan.
