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MENLO PARK - Runway Growth Finance Corp. (NASDAQ:RWAY), currently trading at $9.82 with a market capitalization of $360 million, announced Thursday it has entered into a definitive merger agreement to acquire SWK Holdings Corporation (NASDAQ:SWKH) in a transaction valued at approximately $220 million. According to InvestingPro analysis, RWAY trades at an attractive P/E ratio of 5.5, suggesting potential value for investors.
The acquisition will expand Runway’s portfolio in the healthcare and life sciences sectors, increasing its healthcare investments from 14% to approximately 31% of its portfolio based on June 30, 2025 figures. The deal will also grow Runway’s total assets to $1.3 billion. InvestingPro data shows the company maintains a significant dividend yield of 27.19%, making it particularly attractive for income-focused investors. Additional InvestingPro Tips reveal more insights about RWAY’s financial strength and market position.
Under the terms of the agreement, SWK shareholders will receive $75.5 million in Runway Growth shares and approximately $145 million in cash. Additionally, Runway Growth Capital LLC will contribute $9 million in cash for distribution to SWK stockholders.
"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," said David Spreng, Runway Growth’s Founder and CEO, in the press release. With current revenue of $141 million and a strong financial health score of "GOOD" according to InvestingPro metrics, RWAY appears well-positioned to execute this strategic acquisition. Discover comprehensive analysis and more detailed metrics with InvestingPro’s exclusive Research Report, available for over 1,400 US stocks.
The acquisition is expected to generate mid-single-digit net investment income accretion during the first full quarter following the transaction close. SWK’s portfolio includes 22 companies with an approximate fair value of $242 million based on Runway’s estimates as of August 15, 2025.
SWK’s Board of Directors has unanimously approved the transaction, which is expected to close in late 2025 or the first quarter of 2026, pending SWK shareholder and regulatory approvals.
Runway Growth Finance is a specialty finance company providing flexible capital solutions to late- and growth-stage companies, while SWK Holdings focuses on providing non-dilutive financing to small- and mid-sized commercial-stage healthcare companies.
Simpson Thacher & Bartlett LLP is serving as legal counsel to Runway Growth, while Keefe, Bruyette & Woods is acting as lead financial advisor to SWK with Goodwin Procter serving as legal counsel.
In other recent news, Runway Growth Finance Corp reported its second-quarter 2025 earnings, showcasing a mixed performance. The company posted earnings per share (EPS) of $0.38, slightly missing the forecasted $0.3872, with a -1.86% surprise. However, revenue was a bright spot, reaching $35.15 million, which exceeded expectations of $34.27 million, marking a 2.57% positive surprise. Additionally, Clear Street initiated coverage on Runway Growth Finance with a Hold rating, setting a price target of $11.00. The research firm noted Runway Growth Finance’s role in providing venture debt financing to late-stage and growth companies. These recent developments highlight the company’s position in innovation-driven sectors.
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