CHICAGO--(BUSINESS WIRE)--Chicago Atlantic today announced that Silver Spike Investment Corp. (“SSIC” or the “Company”), a specialty finance company that has elected to be regulated as a business development company, acquired a portfolio of loans (the “CALP Loan Portfolio”) from Chicago Atlantic Loan Portfolio, LLC (“CALP”), a Chicago Atlantic-managed fund, in exchange for newly issued shares of the Company’s common stock (the “Loan Portfolio Acquisition”). As a result of the Loan Portfolio Acquisition, CALP and legacy SSIC stockholders own approximately 72.8% and 27.2%, respectively, of the outstanding shares of the Company’s common stock.
The Company is the only publicly listed BDC focused on lending to cannabis companies. As a result of the Loan Portfolio Acquisition, the Company has net assets of approximately $300 million and investments in 28 portfolio companies.
In connection with the Loan Portfolio Acquisition, the Company was renamed Chicago Atlantic BDC, Inc., and its ticker symbol will be changed to “LIEN.” The changes will become effective in the market at the open of business on October 2, 2024.
Separately, Chicago Atlantic today announced that the investment adviser of CALP closed a transaction with Silver Spike Capital, LLC (“SSC” or the “Adviser”), the investment adviser of the Company, pursuant to which a joint venture between Chicago Atlantic and SSC has been created to combine and jointly operate SSC’s, and a portion of Chicago Atlantic’s, investment management businesses (the “Joint Venture”). The Joint Venture combines two leading investment platforms in the cannabis industry. In connection with the Joint Venture, the Adviser has been renamed Chicago Atlantic BDC Advisers, LLC.
The Company’s officers prior to the Loan Portfolio Acquisition, including Scott Gordon (now Executive Chairman of the board of directors of the Company and Co-Chief Investment Officer of the Company) and Umesh Mahajan (now Co-Chief Investment Officer, Chief Financial Officer and Secretary of the Company), will continue to be a part of the Company’s management team. Andreas Bodmeier, Partner at Chicago Atlantic, has assumed the role of Chief Executive Officer of the Company, and Dino Colonna, previously Partner and Co-Head of Credit of SSC, has assumed the role of President of the Company.
“Chicago Atlantic seeks to capitalize on opportunities in private markets by providing debt capital to lower middle market companies, typically non-sponsor, and unique industries facing structural reasons for an insufficient supply of capital,” stated Bodmeier. “The rapidly growing cannabis sector represents a compelling example.”
“Our BDC allows investors to access a differentiated source of credit alpha from what is typically found in other BDCs or private credit funds,” continued Gordon. “We are excited about the prospects for further growth within our core activity of providing capital to high-quality operators within the cannabis ecosystem. As one of the largest direct lenders to the sector, we see significant potential to continue playing an important role in shaping the flow of much-needed debt financing to the industry.”
The transactions follow Chicago Atlantic’s successful management of Chicago Atlantic Real Estate Finance, Inc. (NASDAQ: REFI), one of NASDAQ’s highest-performing commercial mortgage real estate investment trusts (REIT) based on total returns since its IPO in 2021.
“This is an accretive opportunity from which all shareholders and team members can benefit,” added John Mazarakis, Partner at Chicago Atlantic, “Silver Spike and Chicago Atlantic share synergistic goals, and we are excited to collaborate, innovate, and drive collective results for the benefit of our shareholders.”
About Chicago Atlantic
Chicago Atlantic is an alternative investment manager focused on industries and companies where demand for capital exceeds traditional supply. The firm’s investment strategies include opportunistic private credit and equity with focuses on loans to esoteric industries, specialty asset-based loans, liquidity solutions and growth and technology finance. Chicago Atlantic closed over $2.2 billion in credit facilities to date. Chicago Atlantic’s team of over 80 professionals has offices in Miami, Florida and Chicago, Illinois. For more information on Chicago Atlantic’s investment opportunities and financing products, visit chicagoatlantic.com.
Forward-Looking Statements
Some of the statements in this communication constitute forward-looking statements because they relate to future events, future performance or financial condition of the Company or the Loan Portfolio Acquisition. The forward-looking statements may include statements as to: future operating results of the Company and distribution projections; business prospects of the Company and the prospects of its portfolio companies; and the impact of the investments that the Company expects to make. In addition, words such as “may,” “might,” “will,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “estimate,” “anticipate,” “predict,” “potential,” “plan” or similar words indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this communication involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) the ability to realize the anticipated benefits of the Loan Portfolio Acquisition; (ii) risks related to diverting management’s attention from ongoing business operations; (iii) the risk that stockholder litigation in connection with the Loan Portfolio Acquisition may result in significant costs of defense and liability; (iv) changes in the economy, financial markets and political environment, including the impacts of inflation and rising interest rates; (v) risks associated with possible disruption in the operations of the Company or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine), natural disasters or global health pandemics, such as the COVID-19 pandemic; (vi) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); (vii) changes in political, economic or industry conditions, the interest rate environment or conditions affecting the financial and capital markets that could result in changes to the value of the Company’s assets; (viii) elevating levels of inflation, and its impact on the Company, on its portfolio companies and on the industries in which it invests; (ix) the Company’s plans, expectations, objectives and intentions, as a result of the Loan Portfolio Acquisition; (x) the future operating results and net investment income projections of the Company; (xi) the ability of the Adviser to locate suitable investments for the Company and to monitor and administer its investments; (xii) the ability of the Adviser or its affiliates to attract and retain highly talented professionals; (xiii) the business prospects of the Company and the prospects of its portfolio companies; (xiv) the impact of the investments that the Company expects to make; (xv) the expected financings and investments and additional leverage that the Company may seek to incur in the future; (xvi) conditions in the Company’s operating areas, particularly with respect to business development companies or regulated investment companies; (xvii) the realization generally of the anticipated benefits of the Loan Portfolio Acquisition and the possibility that the Company will not realize those benefits, in part or at all; (xviii) the performance of the loans included in the CALP Loan Portfolio, and the possibility of defects or deficiencies in such loans notwithstanding the diligence performed by the Company and its advisors; (xix) the ability of the Company to realize cost savings and other management efficiencies in connection with the Loan Portfolio Acquisition as anticipated; (xx) the reaction of the trading markets to the Loan Portfolio Acquisition and the possibility that a more liquid market or more extensive analyst coverage will not develop for the Company as anticipated; (xxi) the reaction of the financial markets to the Loan Portfolio Acquisition and the possibility that the Company will not be able to raise capital as anticipated; (xxii) the strategic, business, economic, financial, political and governmental risks and other risk factors affecting the business of the Company and the companies in which it is invested as described in the Company’s public filings with the Securities and Exchange Commission (the “SEC”) and (xxiii) other considerations that may be disclosed from time to time in the Company’s publicly disseminated documents and filings. The Company has based the forward-looking statements included in this communication on information available to it on the date of this communication, and it assumes no obligation to update any such forward-looking statements. Although the Company undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that the Company may make directly to you or through reports that the Company in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
