Runway Growth Finance, a leading provider of flexible capital solutions to late- and growth-stage companies seeking an alternative to raising equity, announced that it has entered into a definitive merger agreement to acquire SWK Holdings Corporation, a life science focused specialty finance company that provides minimally dilutive financing to small- and mid-sized commercial-stage healthcare companies.
Runway Growth’s Founder and CEO, David Spreng, said, “This transaction meaningfully advances our strategy to diversify and optimize our portfolio by adding SWK’s high-quality investments in the key sectors of healthcare and life sciences. At the same time, we are enhancing our earnings power, more than offsetting the anticipated loan repayments we previously signaled, and we expect to deliver mid-single-digit NII accretion. This transaction reinforces the strength of Runway Growth’s portfolio as we work to generate long-term value for our shareholders through disciplined growth and venture debt investing with a focus on excellent credit quality in the sectors we know best. Looking ahead, and with the full support of BC Partners Advisors L.P., we are pursuing growth through both organic and inorganic strategies as a permanent capital vehicle backed by the $10 billion BC Partners Credit platform. We are doing all of this while growing our shareholder base, improving our existing robust portfolio metrics and increasing our total assets to $1.3 billion pro forma with the SWK merger transaction.”
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Key Transaction Highlights
- Expands Position and Investment Capabilities in Healthcare and Life Sciences Sector – SWK’s focus on healthcare and life sciences will expand Runway Growth’s exposure in this large and growing market and Runway Growth Capital’s investment and deal sourcing teams with the addition of members from SWK’s healthcare and life sciences teams. Through this acquisition, the Company’s portfolio composition will change, increasing healthcare investments to approximately 31% of the portfolio from 14% as of June 30, 2025.
- Drives Portfolio Scale and Diversification Through High Quality Complementary Portfolio – The transaction will expand Runway Growth’s balance sheet to $1.3 billion in total assets pro forma for the SWK acquisition, while enhancing the Company’s already strong portfolio metrics through high quality investments in attractive verticals and a meaningful reduction in average loan size.1
- Positions Runway Growth to Execute on Organic and Inorganic Growth Strategies – This acquisition offers Runway Growth a repeatable blueprint, that is non-dilutive to shareholders, for future deals in the venture and growth investment ecosystem. The Company is bolstered by the support of the BC Partners Credit platform, which continues to enable and collaborate on both organic and inorganic strategies with the Runway Growth team.
- Enhances Runway Growth’s Financial Profile and Grows the Shareholder Base – The acquisition is expected to generate mid-single-digit run-rate NII accretion during the first full quarter following the transaction close, as well as drive improvements in dividend coverage and ROE, and expand Runway Growth’s pro-forma leverage ratio. Improvements in Runway Growth’s financial profile will increase the Company’s nominal leverage capacity and support continued risk-adjusted returns. Additionally, Runway Growth is broadening its shareholder base and the trading liquidity of common shares through merger terms, which include $75.5 million in Runway Growth shares to be issued to SWK’s shareholders.
SOURCE: GlobeNewswire