Corporate News Blog – NewStar Financial Acquires Fifth Street Asset Management’s Middle Market CLO Business

LONDON, UK / ACCESSWIRE / July 10, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Fifth Street Asset Management Inc. (NASDAQ: FSAM) (“FSAM”), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=FSAM. The Company announced the sale of Fifth Street CLO Management LLC. (FSCM) to NewStar Financial, Inc. (NASDAQ: NEWS). FSCM is a wholly-owned subsidiary of Fifth Street Holdings L.P. and manages two CLOs backed by middle market loans and holds certain interests in its sponsored CLOs. For immediate access to our complimentary reports, including today’s coverage, register for free now at:

http://protraderdaily.com/register/

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on FSAM and NEWS. Go directly to your stock of interest and access today’s free coverage at:

http://protraderdaily.com/optin/?symbol=FSAM

http://protraderdaily.com/optin/?symbol=NEWS

Commenting on the sale of its CLO business, Leonard M. Tannenbaum, CEO of FSAM said:

“Over the course of FSAM’s strategic review, it became clear to us that given the market environment and headwinds we faced over the past year and a half, it would be difficult to scale our CLO business. We believe that exiting this business line is in the best interest of our shareholders and is an important step as we continue to enhance our liquidity position and streamline operations.”

Tim Conway, Chairman and CEO of NewStar added:

“This acquisition is consistent with our strategy to expand our asset management activities in ways that add to our value proposition for institutional investors and leverage our core strengths in direct lending, securitization and credit management. This transaction also provides an attractive way to diversify our business mix, adding to fee revenue and accelerating improvement in equity returns.”

Details of the transaction

The transaction is valued at approximately $16 million including $13 million in debt. The offer price is subject to adjustments at the time of closing of the transaction. The transaction is expected to close in Q3 2017 and is subject to consents from certain investors and other closing conditions.

Once the transaction is closed, FSCM will be a wholly-owned subsidiary of NewStar and all funds managed by FSCM will be managed by NewStar’s middle market investment team.

FSAM plans to use the funds raised from the sale of its middle market CLO business to reduce its debts and take care of other corporate expenses.

Benefits of the acquisition for NewStar

The acquisition will increase NewStar’s assets under management (AUM) by approximately $726 million. After the transaction is completed, NewStar’s total pro-forma AUM will increase to approximately $7.3 billion.

The transaction is expected to be accretive to NewStar’s EPS (earnings per share) for FY 2017.

The transaction is expected to add to NewStar’s run-rate fee revenue by more than $2.5 million and is also expected to help in the growth of the Company’s asset management activities.

In the last few months, NewStar has been focused on expanding its asset management platform. For this, the Company has launched new managed funds, acquired investment management platforms, and increasing its investment activity. The current acquisition is part of NewStar’s strategy in this direction.

The acquisition is also highly complementary to NewStar’s existing middle market direct lending business and provides balance to its overall asset management platform.

The acquisition significantly increases NewStar’s lending capacity and helps it meet the needs of its private equity clients and make the most of the opportunities in direct lending.

About FSAM

FSAM is a nationally recognized credit-focused asset manager with over two decades track record focused on disciplined investing across multiple economic cycles. The firm has over $4 billion of assets under management across two public Business Development Companies (BDCs): Fifth Street Finance Corp. (NASDAQ: FSC) and Fifth Street Senior Floating Rate Corp. (NASDAQ: FSFR), apart from other multiple private investment vehicles. Since its inception, FSAM has surpassed $10 billion of loan commitments.

About NewStar

Boston, Massachusetts-based NewStar was founded in 2004. It is an internally-managed commercial finance Company with $6.6 billion of assets managed across two complementary business lines – middle market direct lending and asset management. NewStar also offers a range of investment products employing credit-oriented strategies focused on middle market loans and liquid, tradeable credit. Since its inception, the Company has worked with more than 50 different private equity firms on more than 650 deals totaling over $13 billion of financing commitments. The Company has regional offices in Chicago, Darien, and New York.

Last Close Stock Review

On Friday, July 07, 2017, the stock closed the trading session at $4.55, slipping 2.15% from its previous closing price of $4.65. A total volume of 63.55 thousand shares have exchanged hands. Fifth Street Asset Management’s stock price surged 22.97% in the last one month and 15.78% in the previous twelve months. The stock is trading at a PE ratio of 61.49 and has a dividend yield of 10.99%. The stock currently has a market cap of $73.89 million.

At the closing bell, on Friday, July 07, 2017, NewStar Financial’s stock climbed 3.86%, ending the trading session at $10.75. A total volume of 65.86 thousand shares has exchanged hands. The Company’s stock price surged 0.47% in the last three months, 15.34% in the past six months, and 22.30% in the previous twelve months. Moreover, the stock rallied 16.22% since the start of the year. The stock is trading at a PE ratio of 19.13 and has a dividend yield of 0.74%. The stock currently has a market cap of $456.66 million.

Pro-Trader Daily:

Pro-Trader Daily (Pro-TD) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. PRO-TD has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles, and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

PRO-TD has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third-party research service company (the “Reviewer”) represented by a credentialed financial analyst [for further information on analyst credentials, please email contact@protraderdaily.com. Rohit Tuli, a CFA® charter holder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by PRO-TD. PRO-TD is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

PRO-TD, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. PRO-TD, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, PRO-TD, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither PRO-TD nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://protraderdaily.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: contact@protraderdaily.com

Phone number: (917) 341.4653

Office Address: Mainzer Landstrasse 50 Frankfurt am Main, Germany 60325

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Pro-Trader Daily

ReleaseID: 467680