Horizon Technology Finance Corp. and Monroe Capital Corporation Merge to Unlock Shareholder Value and Boost Efficiency

Horizon Technology Finance Corp and Monroe Capital Corporation are merging, expected to unlock shareholder value and establish Horizon as a leading venture debt and growth capital provider. The transaction is accretive, preserving net asset value while creating long-term upside for shareholders. Horizon will receive $165 million in incremental equity capital, enhancing its scale and operational efficiencies. The combined company will benefit from a larger market capitalization, improved trading liquidity, and access to lower-cost financing.

Horizon Technology Finance Corp (HRZN) and Monroe Capital Corporation (MRCC) have entered into a definitive merger agreement, set to unlock shareholder value and position Horizon as a leading venture debt and growth capital provider. The merger, expected to be accretive and preserve net asset value (NAV), is structured as a NAV-for-NAV exchange of shares. The transaction is anticipated to close in the fourth quarter of 2025, subject to customary regulatory approvals and shareholder votes [1].

Under the terms of the merger agreement, Horizon will receive approximately $165 million in incremental equity capital, enhancing its scale and operational efficiencies. The combined company is expected to benefit from a larger market capitalization, improved trading liquidity, and access to lower-cost financing. The merger will also provide Horizon with additional leverageable capital and a larger shareholder base, enabling it to execute on its strategy of being a leading lender in providing venture debt and growth capital to public small-cap growth companies [1].

The merger is structured as a tax-free reorganization under Section 368(a), allowing MRCC shareholders to exchange their shares without incurring immediate tax consequences. The Boards of Directors of MRCC, HRZN, and Monroe Capital Income Plus Corporation (MCIP) have unanimously approved the merger and asset sale, with MRCC and HRZN shareholders expected to vote in favor of the transactions [1].

Horizon Technology Finance Management LLC (HTFM), the affiliate managing Horizon, will continue to manage the combined company, which will trade on the NASDAQ under the symbol HRZN. The merger is expected to be neutral to net investment income (NII) for the combined company during the first year post-closing, with accretion driven by operational savings, portfolio mix optimization, and cost savings from capital structure improvements over the long term [1].

Key transaction highlights include enhanced scale, return accretion, additional capital to support growth, increased access to long-term, lower-cost debt capital, and a tax-free exchange. The merger is expected to provide significant incremental capital and a larger shareholder base for Horizon, translating into stronger long-term total returns for its shareholders [1].

Horizon and MRCC will hold a joint conference call on August 7, 2025, to discuss the transaction. The call details and an investor presentation will be available at [https://ir.horizontechfinance.com](https://ir.horizontechfinance.com) [1].

References:
[1] https://www.businesswire.com/news/home/20250807221575/en/Monroe-Capital-Corporation-and-Horizon-Technology-Finance-Corporation-Enter-into-Definitive-Merger-Agreement