Attached files
| file | filename |
|---|---|
| 8-K - BLACKHAWK CAPITAL GROUP BDC INC | v198774_8k.htm |
|
INVESTMENT
HIGHLIGHTS
|
|
Blackhawk
Capital Group BDC, Inc. (OTCBB: BHCG)
|
|
Up to $1.0mm in Bridge Financing with a Conversion
Option
|
|
|
Ø
|
Blackhawk
Capital Group BDC, Inc. (“Blackhawk” or the “Company”) is offering up to
$1 million in bridge financing to pay off the Company’s debt and to
provide working capital. After it closes the bridge financing,
Blackhawk plans to conduct a public Regulation E Offering (up to $5
million).
|
|
|
Ø
|
The
Lender has the option to convert any portion of its outstanding principal
and interest to equity at a conversion price of $0.50 per share (the
shares of common stock will be restricted securities upon
conversion).
|
|
|
Ø
|
The
bridge financing will be repaid from the proceeds of Blackhawk’s
Regulation E Offering, unless the Lender exercises the conversion
option.
|
|
|
Ø
|
Blackhawk
is a business development company (“BDC”) under the Investment Company Act
of 1940 (“1940 Act”) that commenced operations in 2004 as a Delaware
corporation.
|
|
Ø
|
Blackhawk
is a fully operating company with an existing investment portfolio of one
investment in Macro Markets LLC.
|
|
|
Ø
|
Blackhawk
intends to acquire a portfolio or portfolios of investments for shares of
Blackhawk Common Stock, from one or several holders of assets, in an
amount between $100 million and $250
million.
|
|
|
Ø
|
Blackhawk’s
core business is to invest in the lower quadrant of the US middle-market
in a diverse range of industries, with a specific focus on those
industries where the Company believes it has particular expertise. These
investments will include various types of debt and equity securities
issued by lower middle-market companies with market capitalizations and
revenues under $300 million, a critically underserved segment of the US
capital markets.
|
|
|
Ø
|
Blackhawk
believes its investment strategy with lower middle-market companies is
opportunistic because these companies have been historically
under-serviced, by both the commercial banking industry and Wall Street
firms. This situation has been exacerbated during the current credit
crisis; there are fewer banks and specialty finance companies focused on
financing lower middle-market companies. Record levels of uninvested
private equity capital (estimated at over $500 billion) and refinancing
needs (including $300 billion of high bonds maturing in next two years),
which will fuel demand for leveraged lending, will only exacerbate the
tendency of larger financial services firms to ignore the lower
middle-market.
|
|
|
Ø
|
These
market conditions, which are expected to continue for a prolonged period
of time, will allow Blackhawk to negotiate favorable terms with lower
middle-market companies, including higher yields, lower/safer leverage
levels, more significant covenant protection and greater equity
participation than typical of other market transactions. Blackhawk will
generally seek to avoid competing directly with other capital providers in
order to avoid the less favorable terms typically associated with such
competitive investment
opportunities.
|
|
|
Ø
|
The
Company’s investment objective is to generate both current income and
capital appreciation through debt and equity
investments.
|
|
|
Ø
|
In
addition to its internal management team, if Blackhawk raises sufficient
funds in its Regulation E Offering, Blackhawk has identified, and as the
Company expands its capital resources, will continue to assemble, an
outstanding group of managers and affiliates to assist in the growth and
success of its business:
|
|
|
§
|
Experienced
management team with over 100 years’ experience in leveraged finance and
investing, including former senior professionals from one of the most well
respected dealers in leveraged finance Team participation in
over 3,000 transactions totaling over $175
billion
|
|
|
§
|
Assets
will be managed under supervision of Blackhawk’s investment professionals
by one of the largest and most respected fixed income managers in the
world
|
|
|
§
|
True
“brand name” manager
|
|
|
§
|
Relationship
with one of the world’s leading investment banking firms to source
investment opportunities, including both secondary portfolios and new
originations
|
|
|
§
|
Blackhawk’s
management team will be assisted by a team of advisors including senior
executives of some of the world’s most respected financial services
firms.
|
|
|
Ø
|
Blackhawk
has extensive disclosure requirements as a public company that is
fully-operating with an existing investment portfolio (one investment)
under the 1940 Act.
|
|
|
Ø
|
Blackhawk
has other requirements under the 1940 Act, including mark-to-market
requirements of its investment portfolio, and, if its Board of Direcctors
so determines, it must distribute 90% of pre-tax income to investors each
year, as there is no taxation at corporate level before
distributions.
|
|
|
Ø
|
Blackhawk,
as a BDC, is prohibited from taking on excessive leverage, is required to
have a well diversified investment portfolio, and is required to devote at
least 70% of capital to portfolio
investment.
|
|
|
Ø
|
The
Lender in the bridge financing has the ability to significantly enhance
its fixed income investment with an equity conversion feature that offers
a substantial increase in future basis; in addition, Blackhawk
can provide conduit and syndication opportunities for strategic investors
and lenders.
|
|
|
Ø
|
Prospective
investors should review the risk factors set forth in the quarterly and
annual reports of Blackhawk.
|
2