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CHICAGO - Monroe Capital Corporation (NASDAQ:MRCC) and Horizon Technology Finance Corporation (NASDAQ:HRZN) have entered into a merger agreement under which MRCC will merge with and into HRZN, according to a press release issued by Monroe Capital LLC. HRZN, currently trading at $7.42 and with a market capitalization of approximately $298 million, has maintained consistent dividend payments for 16 consecutive years, as noted by InvestingPro.
Prior to the merger, Monroe Capital Income Plus Corporation (MCIP), a privately offered business development company, will acquire substantially all of MRCC’s assets at fair value for cash. Following this asset sale, MRCC will merge with HRZN, with HRZN continuing as the surviving entity trading on NASDAQ under the symbol HRZN. HRZN currently offers an impressive 17.05% dividend yield, though InvestingPro data reveals some challenges with short-term obligations exceeding liquid assets, as reflected in its current ratio of 0.71.
Under the terms of the agreement, MRCC shareholders will receive HRZN shares with a net asset value equal to the NAV of their MRCC shares. Former MRCC shareholders are expected to own approximately 37% of HRZN after the merger.
The combined entity will have an estimated NAV of approximately $446 million based on June 30, 2025 financials, adjusted for merger-related expenses. Horizon Technology Finance Management has agreed to waive $4 million in management and incentive fees over the first four quarters following the closing. This comes at a time when HRZN’s revenue has declined by 11.89% over the last twelve months, with the stock currently trading near its 52-week low of $7.09. Get detailed analysis and more key metrics with InvestingPro’s comprehensive research report.
"This innovative, shareholder-friendly transaction unlocks shareholder value within MRCC while also placing the combined HRZN entity in a much better position to serve borrowers," said Theodore L. Koenig, Chairman & CEO of Monroe Capital.
The boards of directors of all three companies have unanimously approved the transaction. The merger is expected to close in the fourth quarter of 2025, subject to regulatory approvals and shareholder votes.
The companies anticipate the merger will provide enhanced scale, operational savings, and improved access to debt funding solutions. The transaction is structured as a tax-free reorganization under Section 368(a), allowing MRCC shareholders to exchange their shares without immediate tax consequences.
The information in this article is based on a press release statement from Monroe Capital LLC.
In other recent news, Horizon Technology Finance Corporation announced several significant leadership changes. The company has appointed Paul Seitz as its new Chief Investment Officer, succeeding Daniel Devorsetz, who will stay with the company until September 2025. Seitz brings extensive experience from his previous roles at Monroe Capital, TriplePoint Capital, and NXT Capital. Additionally, Horizon Technology Finance has named Danny Hurwitz as Managing Director, focusing on originating new investments through various channels. Hurwitz joins with over 30 years of experience in investment banking and institutional equity sales. The company also announced a forthcoming leadership transition, with Robert D. Pomeroy, Jr. set to retire as CEO on June 5, 2025. Michael P. Balkin, an independent director since June 2023, will take over as CEO. Gerald A. Michaud will step down as President but will remain active with the company until the end of the year. These changes are part of Horizon’s strategic succession planning.
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