Venture Growth Stage Focus Delivers Attractive Returns in Period
Following Successful IPO on March 5, 2014
TriplePoint Capital Direct Originations Platform Generates Strong
Pipeline for Debt Financing to Venture Growth Stage Companies
MENLO PARK, Calif.--(BUSINESS WIRE)--
TriplePoint Venture Growth BDC Corp. (NYSE: TPVG) (the “Company”), the
leading financing provider to venture growth stage companies in the
technology, life sciences and other high growth industries backed by a
select group of leading venture capital investors, today announced its
financial results for its quarter ended March 31, 2014, and its second
quarter 2014 dividend of $0.30 per share. The results presented reflect
the Company’s performance from the pricing of its initial public
offering on March 5, 2014, through March 31, 2014.
March 5, 2014 Through March 31, 2014 Highlights:
-
Raised $147.6 million in total gross proceeds through a successful
IPO, including the exercise in full by the underwriters of their
option to purchase additional shares of common stock and a concurrent
private placement of common stock.
-
Closed a $150.0 million multi-year revolving credit facility.
-
Declared an initial dividend of $0.09 per share, equating to a
quarterly dividend rate of $0.30 per share and an annualized dividend
rate of $1.20 per share.
-
Earned core net investment income(1) of $844,000, or $0.09
per share.
-
Generated an additional $25.0 million of signed term sheets with
venture growth stage companies through TriplePoint Capital’s direct
originations platform; closed $7.5 million of new commitments and
funded $18.2 million in new investments.
-
Held warrants and equity with an aggregate fair value of $6.4 million
as of March 31, 2014.
-
Net asset value of $143.5 million, or $14.58 per share, as of March
31, 2014.
-
Appointed Harold Zagunis chief financial officer.
"We are pleased with the performance of our venture growth stage
strategy in the initial period following our successful IPO,” said Jim
Labe, chief executive officer and chairman of the board of the Company.
“TriplePoint Capital has an industry-leading platform and we are poised
to capitalize on our brand, reputation and track record. We will
continue our investment strategy of leveraging our established
relationships with venture capital investors and venture capital-backed
companies, understanding the capital needs of venture growth stage
companies, and structuring and customizing attractive financing
solutions to meet their financing needs. We believe this proven approach
will deliver sustainable returns, cash flow and stock price appreciation
to our stockholders over the long term.”
“We appreciate the strong response that our IPO has received from the
investment community and our marketplace and we are focused on
delivering on our promise,” said Sajal Srivastava, president and chief
investment officer of the Company. “Our initial period results affirm
the strength of our model and strategy. Based on our strong pipeline of
attractive investment opportunities, we are growing and scaling our
platform in a manner that we believe will deliver significant benefits
to our stockholders.”
Portfolio and Investment Activity
On March 5, 2014, in conjunction with the initial public offering, the
Company purchased its initial portfolio of assets from TriplePoint
Capital and its affiliates for approximately $123.7 million, comprised
of $118.5 million of debt investments, $3.2 million of warrant
investments and $2.0 million of equity investments. During the period
from March 5, 2014 (commencement of operations) through March 31, 2014,
the Company entered into $7.5 million of new commitments, funded six
debt investments for $18.2 million and earned warrants representing $0.3
million of value.
As of March 31, 2014, the Company had 47 investments in 17 portfolio
companies. The total cost and fair value of these investments were
$142.3 million and $143.6 million, respectively. As of March 31, 2014,
one of the Company’s customers was publicly traded and the other 16 were
privately held.
The following table shows detailed information of the total investment
portfolio as of March 31, 2014.
(dollars in thousands)
|
|
As of March 31, 2014
|
|
|
Cost
|
|
Fair Value
|
|
Net Unrealized Gains
|
|
Number of Investments
|
|
Number of Companies
|
|
|
|
|
|
Debt Investments
|
|
$
|
136,745
|
|
$
|
137,272
|
|
$
|
527
|
|
29
|
|
13
|
Warrant Investments
|
|
|
3,530
|
|
|
4,377
|
|
|
847
|
|
16
|
|
16
|
Equity Investments
|
|
|
2,000
|
|
|
2,000
|
|
|
-
|
|
2
|
|
2
|
Total Investments
|
|
$
|
142,275
|
|
$
|
143,649
|
|
$
|
1,374
|
|
47
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unfunded Commitments
As of March 31, 2014, the Company’s unfunded commitments totaled $140.6
million. Since these commitments may expire without being drawn upon,
unfunded commitments do not necessarily represent future cash
requirements or future earning assets for the Company.
Signed Term Sheets
For the period from March 5, 2014, through March 31, 2014, TriplePoint
Capital’s direct originations platform also generated approximately
$25.0 million of signed non-binding term sheets to venture growth stage
companies. These are in addition to the $25.0 million of signed
non-binding term sheets generated prior to the pricing of the Company’s
IPO on March 5, 2014. All of these opportunities are subject to a number
of conditions including completion of due diligence, negotiation of
definitive documentation and investment committee approval, as well as
compliance with TriplePoint Capital's allocation policy. Accordingly,
there is no assurance that any or all of these transactions will be
completed or assigned to the Company even though the Company is the
primary vehicle through which TriplePoint Capital focuses its venture
growth stage business.
Income Statement
For the period from March 5, 2014, to March 31, 2014, the Company’s
investment income totaled $1.3 million, representing an average yield of
14.3% on the average balance of its investments for the period held.
Operating expenses for the period from March 5, 2014, to March 31, 2014,
were $739,000, consisting of $154,000 of interest expense and
amortization of deferred credit facility costs, $144,000 of base
management fees, $52,000 of administration agreement expenses, $114,000
of general and administrative expenses and $275,000 of accrued capital
gains incentive fees.
For the period from March 5, 2014, to March 31, 2014, the Company
recorded net investment income of approximately $569,000, or $0.06 per
share. Excluding the impact of the capital gains incentive fee, the
Company’s core net investment income(1) was $844,000, or
$0.09 per share.
For the period from March 5, 2014, through March 31, 2014, the Company’s
net change in unrealized gains on investments was $1.4 million, or $0.14
per share, consisting of $0.9 million of net change in unrealized gains
on warrants and $0.5 million of net change in unrealized gains on debt
investments. The Company had no realized gains or losses during the
period from March 5, 2014, to March 31, 2014.
The Company’s net increase in net assets resulting from operations for
the period from March 5, 2014, to March 31, 2014, was $1.9 million, or
$0.20 per share.
Credit Quality
The Company maintains a credit watch list with borrowers placed into
five groups based on its judgment. During the period since the
acquisition of the initial portfolio through the end of the quarter,
there were no changes within these categories. As of March 31, 2014, the
weighted average investment ranking of the Company’s debt investment
portfolio was 1.96.
The following table shows the credit rankings for the 13 companies with
which the Company has debt investments outstanding, as of March 31, 2014.
(dollars in thousands)
|
|
As of March 31, 2014
|
Category
|
|
Fair Value
|
|
|
Percentage of Debt Investment Portfolio
|
|
|
|
Number of Portfolio Companies
|
Clear (1)
|
|
$
|
5,275
|
|
|
|
3.8
|
%
|
|
|
1
|
White (2)
|
|
|
131,997
|
|
|
|
96.2
|
|
|
|
12
|
Yellow (3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Orange (4)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
Red (5)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
137,272
|
|
|
|
100.0
|
%
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value
As of March 31, 2014, the Company’s net assets were $143.5 million, or
$14.58 per share, as compared to $141.6 million, or $14.38 per share as
of March 5, 2013, the date of the pricing of the Company’s IPO and the
commencement of the Company’s operations. The per share calculation is
based on the Company’s 9.84 million shares of common stock outstanding
as of March 31, 2014.
Liquidity and Capital Resources
As of March 31, 2014, the Company had cash and cash equivalents of $71.1
million, with additional capacity of $130.0 million available under the
Company’s revolving credit facility. Included in cash and cash
equivalents were U.S. Treasury bills which the Company sold on April 1,
2014.
On March 11, 2014, the Company announced the completion of its IPO of
9,583,333 shares of its common stock, including the full exercise by the
underwriters of their option to purchase additional shares and a
concurrent private placement of 257,332 shares, at a public offering
price of $15.00 per share, for total gross proceeds of approximately
$147.6 million.
Dividend
The Company’s board of directors declared a quarterly dividend of $0.30
per share for the second quarter of 2014 payable on June 17, 2014, to
stockholders of record as of May 30, 2014. This dividend reflects an
annualized dividend rate of $1.20 per share.
The Company’s initial dividend of $0.09 per share for the 27-day period
from March 5, 2014, to March 31, 2014, also reflected a quarterly
dividend rate of $0.30 per share and was paid on April 30, 2014, to
stockholders of record on April 15, 2014.
Subsequent Events
Since March 31, 2014:
-
The Company closed commitments of $40.0 million.
-
The Company funded $10.3 million in new investments.
-
TriplePoint Capital’s direct originations platform entered into $55.0
million of additional non-binding signed term sheets with venture
growth stage companies, subject to due diligence, definitive
documentation and investment committee approval, as well as compliance
with TriplePoint Capital's allocation policy.
Conference Call
The Company will host a conference call at 5:00 p.m. Eastern Time today,
May 13, 2014, to discuss its financial results for the period ending
March 31, 2014. To listen to the call, investors and analysts should
dial 877-201-0168 (domestic) or 647-788-4901 (international) and enter
conference ID 37027811. Please dial in at least five minutes before the
scheduled start time. A replay of the call will be available through May
26, 2014, by dialing 855-859-2056 (domestic) or 404-537-3406
(international) and entering the passcode 37027811. The conference call
also will be available via a live audio webcast in the investor
relations section of the Company’s website, http://www.tpvg.com.
An online archive of the webcast will be available on the Company’s
website for 30 days after the call.
About TriplePoint Venture Growth BDC Corp.
TriplePoint Venture Growth BDC Corp. (the “Company”) (NYSE: TPVG) is an
externally managed, closed-end, non-diversified management investment
company that has elected to be regulated as a business development
company under the Investment Company Act of 1940, as amended. It was
formed to expand the venture growth stage business segment of its
sponsor, TriplePoint Capital LLC. The Company’s investment objective is
to maximize its total return to stockholders primarily in the form of
current income and, to a lesser extent, capital appreciation by
primarily lending with warrants to venture growth stage companies
focused in technology, life sciences and other high growth industries
backed by a select group of leading venture capital investors. More
information is available at http://www.tpvg.com.
Forward-Looking Statements
Certain statements contained in this press release constitute
forward-looking statements as such term is defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, and such statements are intended to be
covered by the safe harbor provided by the same. Forward-looking
statements are subject to substantial risks and uncertainties, many of
which are difficult to predict and are generally beyond the Company's
control. Words such as "anticipates," "expects," "intends," "plans,"
"will," "may," "continue," "believes," "seeks," "estimates," "would,"
"could," "should," "targets," "projects," and variations of these words
and similar expressions are intended to identify forward-looking
statements. For a further list and description of such risks and
uncertainties, see the Company's final prospectus filed with the
Securities and Exchange Commission on March 7, 2014, and other reports
filed by the Company with the Securities and Exchange Commission. The
forward-looking statements, and other risks, uncertainties and factors
are based on the Company's beliefs, assumptions and expectations of its
future performance, taking into account all information currently
available to the Company. Forward-looking statements are not predictions
of future events. The Company disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise, except as required by law.
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
(dollars in thousands, except share data)
|
|
|
|
|
|
As of March 31, 2014
|
Assets
|
|
|
|
Investments at fair value (amortized cost of $142,275)
|
|
$
|
143,649
|
Cash and cash equivalents
|
|
|
71,152
|
Deferred credit facility costs
|
|
|
2,931
|
Prepaid expenses
|
|
|
262
|
Total Assets
|
|
|
217,994
|
|
|
|
|
Liabilities
|
|
|
|
Revolving credit facility payable
|
|
|
20,000
|
Payable for U.S. Treasury bill assets
|
|
|
49,999
|
Base management fee payable
|
|
|
144
|
Accrued capital gains incentive fee
|
|
|
275
|
Other accrued expenses and liabilities
|
|
|
4,060
|
Total Liabilities
|
|
|
74,478
|
|
|
|
|
Net Assets
|
|
$
|
143,516
|
|
|
|
|
Preferred stock, par value $0.01 per share (50,000,000 shares
authorized; no shares issued and outstanding)
|
|
$
|
-
|
Common stock, par value $0.01 per share (450,000,000 shares
authorized; 9,842,333 shares issued and outstanding)
|
|
|
98
|
Paid-in capital in excess of par value
|
|
|
141,475
|
Net investment income
|
|
|
569
|
Accumulated net unrealized gains
|
|
|
1,374
|
Net Assets
|
|
$
|
143,516
|
|
|
|
|
Net Asset Value per Share
|
|
$
|
14.58
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except share data)
|
|
|
For the period from March 5, 2014 (Commencement of
Operations) to March 31, 2014
|
Investment Income
|
|
|
|
Interest income from investments
|
|
$
|
1,308
|
|
|
|
|
Operating Expenses
|
|
|
|
Base management fee
|
|
|
144
|
Capital gains incentive fee
|
|
|
275
|
Interest expense and amortization of fees
|
|
|
154
|
Administration agreement expenses
|
|
|
52
|
General and administrative expenses
|
|
|
114
|
Total Operating Expenses
|
|
|
739
|
|
|
|
|
Net investment income
|
|
|
569
|
Net realized gains
|
|
|
-
|
Net change in unrealized gains on investments
|
|
|
1,374
|
|
|
|
|
Net Increase in Net Assets Resulting from Operations
|
|
$
|
1,943
|
|
|
|
|
Core net investment income(1) per share
|
|
$
|
0.09
|
Net investment income per share
|
|
$
|
0.06
|
Net change in net assets per share
|
|
$
|
0.20
|
Weighted average shares outstanding
|
|
|
9,842,333
|
|
|
|
|
|
|
|
TRIPLEPOINT VENTURE GROWTH BDC CORP
FINANCIAL
HIGHLIGHTS
(dollars in thousands, except share data)
|
|
|
|
|
For the period from March 5, 2014 (Commencement of
Operations) to March 31, 2014
|
|
|
|
|
Per Share Data
|
|
|
|
Net asset value at beginning of period
|
|
$
|
15.00
|
Offering costs
|
|
|
(0.62)
|
Net investment income
|
|
|
0.06
|
Net increase in unrealized gain on investments
|
|
|
0.14
|
Net asset value at end of period
|
|
$
|
14.58
|
|
|
|
|
Ratio / Supplemental Data:
|
|
|
|
Net asset value at end of period
|
|
$
|
143,516
|
Average net asset value
|
|
$
|
142,544
|
|
|
|
|
The following information is presented on an annualized basis
|
|
Average yield on debt investments
|
|
|
14.3%
|
Coupon income on debt investments
|
|
|
11.2%
|
Net accretion of discount and end-of-term payments
|
|
|
3.1%
|
|
|
|
|
Core net investment income(1) to average net asset value
|
|
|
8.0%
|
Net investment income to average net asset value
|
|
|
5.4%
|
Net increase in net assets to average net asset value
|
|
|
18.4%
|
|
|
|
|
Operating expenses excluding incentive fees to average net asset
value
|
|
|
2.9%
|
Income incentive fees to average net asset value
|
|
|
-
|
Capital gains incentive fees to average net asset value
|
|
|
2.6%
|
Total operating expenses to average net asset value
|
|
|
5.5%
|
|
|
|
|
The following table provides a reconciliation of net investment income
to core net investment income for the period from March 5, 2014 through
March 31, 2014.
TRIPLEPOINT VENTURE GROWTH BDC CORP
RECONCILIATION OF CORE NET INVESTMENT INCOME
(dollars in thousands, except share data)
|
|
|
|
|
|
For the period from March 5, 2014 (Commencement of
Operations) to March 31, 2014
|
|
|
|
|
Net investment income
|
|
$
|
569
|
Capital gains incentive fee 275
|
|
|
Core net investment income
|
|
$
|
844
|
|
|
|
|
Net investment income per share
|
|
$
|
0.06
|
Capital gains incentive fee per share
|
|
|
0.03
|
Core net investment income per share
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
For the period from March 5, 2014, to March 31, 2014, the Company
recorded accrued capital gains incentive fee of $275,000. The capital
gains incentive fee accrual, as reported under generally accepted
accounting principles, is calculated on the basis of net realized and
unrealized gains and losses at the end of each period. The accrued
capital gains incentive fee related to the hypothetical liquidation of
the portfolio (and assuming no other changes in realized or unrealized
gains and losses) would only have become payable on March 31, 2014, to
its investment adviser in the event of a complete liquidation of its
portfolio as of period end and the termination of the Investment
Advisory Agreement (“Agreement”).
The amount of the capital gains incentive fee, if any, which will
actually be payable is determined in accordance with the terms of the
Agreement and is calculated as of the end of each calendar year (or upon
termination of the Agreement). The terms of the Agreement state that the
capital gains incentive fee calculation is based on net realized gains,
if any, offset by gross unrealized depreciation for the calendar year.
No effect is given to gross unrealized appreciation in this calculation.
(1) Core net investment income is a non-GAAP measure and is provided in
addition to, but not as a substitute for, net investment income. Core
net investment income represents net investment income excluding the
Company’s capital gains incentive fee.
Source: TriplePoint Venture Growth BDC Corp.