Kayne Anderson BDC Invests in SG Credit Partners, Expands Lower Middle Market Credit Platform

Kayne Anderson BDC has invested in SG Credit Partners, a leading lower middle market credit platform. The investment will provide $80m in term loans, $34m in delayed draw term loans, and $12m in common equity. This complements KBDC's private credit investment capabilities and is expected to be immediately accretive to earnings in 2025. The investment will also make KBDC a significant minority shareholder in SG Credit.

Kayne Anderson BDC, Inc. (NYSE: KBDC) has announced a significant investment in SG Credit Partners, Inc. (SG Credit), a leading lower middle market credit platform. The investment, which includes $80 million in term loans, $34 million in delayed draw term loans, and $12 million in common equity, complements KBDC's private credit investment capabilities and is expected to be immediately accretive to earnings in 2025. This strategic move will also make KBDC a significant minority shareholder in SG Credit.

SG Credit was founded in 2013 and has invested in over 200 companies, originating over $1 billion in commitments across its three lending verticals: Commercial Finance, Consumer Products, and Software & Technology. With offices in Newport Beach, Santa Monica, Atlanta, Boston, and Chicago, SG Credit plans to use its expanded capital base to grow existing verticals and develop adjacent businesses.

The investment aligns with KBDC's strategy to diversify its proprietary investment channels and enhance the returns of its diversified portfolio. Doug Goodwillie, Co-Chief Executive Officer of KBDC, stated, "This is a key strategic opportunity for KBDC and highlights our commitment to growing our portfolio with value-enhancing investments. SG Credit’s unique lower middle market lending platform is highly complementary to our business and will further enhance the returns of KBDC’s diversified portfolio."

Frank Karl, Senior Vice President of KBDC, added, "There have been a number of highly successful investments by BDCs and credit managers into asset-based platforms and finance companies in the past few years. We have known the team at SG Credit for many years and they have delivered a strong track record of returns for their investors. We think that their investment culture is well-aligned with KBDC’s and are excited to partner with the team to provide a greater breadth of financing solutions to our clients."

The transaction is structured as an $80.0 million term loan facility, $34.0 million delayed draw term loan facility, and $12.0 million common equity investment. Fenchurch Advisory Partners US LP is serving as the financial advisor to KBDC, while Mayer Brown LLP is acting as the legal advisor. Solomon Partners is serving as the financial advisor to SG Credit, with Greenberg Traurig LLP and Brenner, Saltzman & Wallman LLP acting as legal advisors.

About Kayne Anderson BDC, Inc.
Kayne Anderson BDC, Inc. is a business development company (BDC) that invests primarily in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies. KBDC is externally managed by its investment adviser, KA Credit Advisors, LLC, an indirect controlled subsidiary of Kayne Anderson Capital Advisors, L.P., a prominent alternative investment management firm. KBDC has elected to be regulated as a BDC under the Investment Company Act of 1940, as amended. [1]

About SG Credit Partners, Inc.
SG Credit Partners is a national private credit manager providing capital to lower middle market businesses and entrepreneurs requiring tailored credit solutions. SGCP has established a broad credit platform consisting of three verticals: Software + Technology, Consumer Products, and Commercial Finance. Headquartered in Southern California with offices throughout the country, the firm has provided in excess of $1 billion to lower middle market entrepreneurs across a variety of industries. [1]

References:
[1] https://www.stocktitan.net/news/KBDC/kayne-anderson-bdc-inc-announces-investment-in-sg-credit-partners-aowr419t3upt.html