Stellus Capital Management Provides Unitranche Financing for Tailwind Capital's Investment in DMD Systems Recovery

Stellus Capital Management provided unitranche financing and an equity co-investment to support Tailwind Capital's investment in DMD Systems Recovery, an IT asset disposition solutions provider. The financing will support DMD's growth and M&A strategy, with a focus on maximizing secondary resale value for clients. Tailwind and Stellus have a proven track record of scaling IT services businesses and value their partnership.

Stellus Capital Management, LLC (Stellus) has announced that its affiliates have provided senior debt financing and an equity co-investment to support Tailwind Capital's (Tailwind) investment in DMD Systems Recovery (DMD). DMD is an end-to-end IT asset disposition (ITAD) solutions provider that focuses on aging data center and networking infrastructure, as well as end-user compute assets. The company offers a range of services including asset auditing, secure wiping, deinstallation, lease return management, data center decommissioning, on-site services, and secure disposal, aiming to maximize secondary resale value for clients.

The financing and equity co-investment are designed to support DMD's continued organic growth and M&A strategy. Tailwind Partner, Will Fleder, expressed his enthusiasm about the partnership, stating, "DMD services a global client base and is well-positioned to capitalize on the broader ITAD market tailwinds. We value our partnership with Stellus and are excited to work together in support of DMD's future growth." Doug Bollermann, Managing Director at Stellus, echoed this sentiment, noting that DMD's solution-oriented offerings and impressive momentum since inception present an attractive opportunity to build a broader ITAD platform.

Stellus Capital Management is an externally managed, closed-end, non-diversified management investment company that operates as a business development company. Its investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation through debt and related equity investments in middle-market companies. The company invests primarily in private United States middle-market companies through various financing methods, including unitranche financing, with corresponding equity co-investments Stellus Capital Prices $50 Million of 7.25% Notes due 2030^[2].

This investment aligns with Stellus's strategy to originate and invest in middle-market companies with a focus on IT services. The partnership with Tailwind and DMD demonstrates Stellus's commitment to supporting businesses in the ITAD sector and capitalizing on market opportunities.