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Sierra, MCC and MDLY Announce Merger to Create 2nd Largest Internally Managed BDC

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Sierra Income Corporation ("Sierra" or the "Company"), Medley Capital
Corporation (NYSE:MCC, "MCC")) (TASE: MCC), and Medley Management Inc.
(NYSE:MDLY, "MDLY" or "Medley")) joint announcement.

Sierra, MCC and MDLY have entered into definitive agreements for Sierra
to acquire MCC and MDLY. MCC will merge with and into Sierra, with
Sierra as the surviving company. Simultaneously, Sierra will acquire
MDLY, and MDLY's existing asset management business will operate as a
wholly-owned subsidiary of Sierra. The Boards of Directors of Sierra,
MCC and MDLY unanimously approved the transactions based on
recommendations of independently advised special committees of
independent directors at each company, respectively.

Transaction Highlights:

  • The combined company will have over $5 billion of assets under
    management, including $2 billion of internally managed assets1
  • Sierra is expected to be the second largest internally managed
    Business Development Company ("BDC") and the seventh largest publicly
    traded BDC
  • Expected to be accretive to net investment income per share for both
    Sierra and MCC
  • Expected to increase liquidity for shareholders of Sierra, MCC and MDLY

The transaction is expected to add scale to the BDC platform, increase
operational efficiencies, create a stronger balance sheet and improve
portfolio diversification. In addition, growth of MDLY's existing asset
management business would add to NII and NAV over time.

The senior leadership and the investment management teams will remain
intact as part of this transaction. The board of Sierra following the
transaction will consist of the current independent directors from
Sierra, one interested director from Sierra and two independent
directors from MCC.

MCC shareholders will receive 0.8050 shares of Sierra Common Stock for
each share of MCC Common Stock.

MDLY Class A shareholders will receive 0.3836 shares of Sierra Common
Stock for each Medley Class A share, $3.44 per share of cash
consideration and $0.65 per share of special cash dividends.

Medley LLC Unitholders have agreed to convert their units into MDLY
Class A Common Stock, and will receive 0.3836 shares of Sierra Common
Stock for each MDLY Class A share, $3.44 per share of cash consideration
and a $0.35 per share special cash dividend. As part of the transaction,
Medley LLC Unitholders have agreed to forgo all payments that would be
due to them under the existing Tax Receivable Agreement with Medley for
the benefit of the combined company.

At close, current Sierra shareholders will continue to own shares of
Sierra Common Stock. As a condition to closing the transactions,
Sierra's common stock will be listed to trade on the New York Stock
Exchange and Sierra will remain a BDC. There are no expected changes to
the current dividend policies of the respective entities prior to the
closing of the transaction, except that MCC will be promptly terminating
any feature of its dividend reinvestment plan. In addition, Sierra will
be promptly suspending any share repurchase program or offers to
repurchase. It is anticipated that Sierra will continue with its current
dividend policy after the close of the transaction.

"We are excited to bring together these three complementary entities to
create a single, large-scale BDC and credit manager," said Brook Taube,
CEO of Medley.

The mergers are cross conditioned upon each other and are subject to
approval by Sierra, MCC and MDLY shareholders, regulatory review, other
customary closing conditions and third party consents. The transaction
is expected to close in the fourth quarter of 2018 or early in 2019.

Transaction Advisors:

  • The Special Committee of Sierra Income Corporation's Board of
    Directors is served by financial advisor Broadhaven Capital Partners,
    LLC and legal counsel Sullivan & Worcester LLP
  • The Special Committee of Medley Capital Corporation's Board of
    Directors is served by financial advisor Sandler O'Neill + Partners,
    L.P. and legal counsel Kramer Levin Naftalis & Frankel LLP
  • The Special Committee of Medley Management Inc.'s Board of Directors
    is served by financial advisor Barclays Capital Inc. and legal counsel
    Potter Anderson & Corroon LLP
  • Medley Management Inc. is served by financial advisor Goldman Sachs &
    Co. LLC and legal counsel Eversheds Sutherland (US) LLP

Joint Conference Call

Sierra, MCC and Medley will host a joint conference call at 9:00am
(Eastern Time), August 10, 2018, to discuss the transactions.

All interested parties are welcome to participate and can access the
conference call by dialing (877) 524-5743 and using the conference ID
5547448 approximately 10 minutes prior to the call. For interested
parties, an archived replay of the joint conference call will be
available by dialing (855) 859-2056 and using the conference ID 5547448.
This conference call will be broadcast live over the Internet and can be
accessed by all interested parties through Medley's website, http://www.mdly.com.
To listen to the live call, please go to Medley's website at least 15
minutes prior to the start of the call to register and download any
necessary audio software.

An archived replay will also be available through a webcast link located
on the page of the Investor Relations section of Medley's website.

A joint slide presentation containing supplemental information from
Sierra, MCC and Medley will be referenced on the conference call and is
available on each of the entities' websites.

ABOUT SIERRA INCOME CORPORATION

Sierra is a non-traded business development company ("BDC") that invests
primarily in first lien senior secured debt, second lien secured debt
and, to a lesser extent, subordinated debt of middle market companies in
a broad range of industries with annual revenue between $50 million and
$1 billion. Sierra's investment objective is to generate current income,
and to a lesser extent, long-term capital appreciation. Sierra is
externally managed by SIC Advisors LLC, which is an investment adviser
registered under the Investment Advisers Act of 1940, as amended. For
additional information, please visit Sierra Income Corporation at www.sierraincomecorp.com.

ABOUT MEDLEY CAPITAL CORPORATION

Medley Capital Corporation is a closed-end, externally managed business
development company ("BDC") that trades on the New York Stock Exchange
(NYSE:MCC) and the Tel Aviv Stock Exchange (TASE: MCC). Medley Capital
Corporation's investment objective is to generate current income and
capital appreciation by lending to privately-held middle market
companies, primarily through directly originated transactions, to help
these companies expand their businesses, refinance and make
acquisitions. Our portfolio generally consists of senior secured first
lien loans and senior secured second lien loans. Medley Capital
Corporation is externally managed by MCC Advisors LLC, which is an
investment adviser registered under the Investment Advisers Act of 1940,
as amended. For additional information, please visit Medley Capital
Corporation at www.medleycapitalcorp.com.

ABOUT MEDLEY

Medley is an alternative asset management firm offering yield solutions
to retail and institutional investors. Medley's national direct
origination franchise is a premier provider of capital to the middle
market in the U.S. Medley has over $5 billion of assets under management
in two business development companies, Medley Capital Corporation (NYSE: MCC) (TASE: MCC) and Sierra Income Corporation, a credit interval
fund, Sierra Total Return Fund (NASDAQ:SRNTX) and several private
investment vehicles. Over the past 15 years, Medley has provided capital
to over 400 companies across 35 industries in North America.2

Medley LLC, the operating company of Medley Management Inc., has
outstanding bonds which trade on the NYSE under the symbols (NYSE:MDLX)
and (NYSE:MDLQ). Medley Capital Corporation is dual-listed on the New
York Stock Exchange (NYSE:MCC) and the Tel Aviv Stock Exchange (TASE:
MCC) and has outstanding bonds which trade on both the New York Stock
Exchange under the symbols (NYSE:MCV), (NYSE:MCX) and the Tel Aviv
Stock Exchange under the symbol (TASE: MCC.B1).

Forward-Looking Statements

This communication contains "forward-looking" statements as that 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 by the
Private Securities Litigation Reform Act of 1995, including statements
regarding the proposed transactions. Such forward-looking statements
reflect current views with respect to future events and financial
performance, and each of Sierra, MCC and Medley may make related oral
forward-looking statements on or following the date hereof. Statements
that include the words "should," "would," "expect," "intend," "plan,"
"believe," "project," "anticipate," "seek," "will," and similar
statements of a future or forward-looking nature identify
forward-looking statements in this material or similar oral statements
for purposes of the U.S. federal securities laws or otherwise. Because
forward-looking statements, such as the date that the parties expect the
proposed transactions to be completed and the expectation that the
proposed transactions will provide improved liquidity for Sierra, MCC,
and Medley stockholders and will be accretive to net investment income
for both Sierra and MCC, include risks and uncertainties, actual results
may differ materially from those expressed or implied and include, but
are not limited to, those discussed in each of Sierra's, MCC's and
Medley's filings with the Securities and Exchange Commission (the
"SEC"), and (i) the satisfaction or waiver of closing conditions
relating to the proposed transactions described herein, including, but
not limited to, the requisite approvals of the stockholders of each of
Sierra, MCC, and Medley, Sierra successfully taking all actions
reasonably required with respect to certain outstanding indebtedness of
MCC and Medley to prevent any material adverse effect relating thereto,
certain required approvals of the SEC and the Small Business
Administration, the necessary consents of certain third-party advisory
clients of Medley, and any applicable waiting period (and any extension
thereof) applicable to the transactions under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, shall have expired or
been terminated, (ii) the parties' ability to successfully consummate
the proposed transactions, and the timing thereof, and (iii) the
possibility that competing offers or acquisition proposals related to
the proposed transactions will be made and, if made, could be
successful. Additional risks and uncertainties specific to Sierra, MCC
and Medley include, but are not limited to, (i) the costs and expenses
that Sierra, MCC and Medley have, and may incur, in connection with the
proposed transactions (whether or not they are consummated), (ii) the
impact that any litigation relating to the proposed transactions may
have on any of Sierra, MCC and Medley, (iii) that projections with
respect to dividends may prove to be incorrect, (iv) Sierra's ability to
invest our portfolio of cash in a timely manner following the closing of
the proposed transactions, (v) the market performance of the combined
portfolio, (vi) the ability of portfolio companies to pay interest and
principal in the future; (vii) the ability of Medley to grow its fee
earning assets under management; (viii) whether Sierra, as the surviving
company, will trade with more volume and perform better than MCC and
Medley prior to the proposed transactions; and (ix) negative effects of
entering into the proposed transactions on the trading volume and market
price of the MCC's or Medley's common stock.

The foregoing review of important factors should not be construed as
exhaustive and should be read in conjunction with the other cautionary
statements that will be included in the Joint Proxy Statement/Prospectus
(as defined below) relating to the proposed transactions, and in the
"Risk Factors" sections of each of Sierra's, MCC's and Medley's most
recent Annual Report on Form 10-K and most recent Quarterly Report on
Form 10-Q. The forward- looking statements in this press release
represent Sierra's, MCC's and Medley's views as of the date of hereof.
Sierra, MCC and Medley anticipate that subsequent events and
developments will cause their views to change. However, while they may
elect to update these forward-looking statements at some point in the
future, none of Sierra, MCC or Medley have the current intention of
doing so except to the extent required by applicable law. You should,
therefore, not rely on these forward-looking statements as representing
Sierra's, MCC's or Medley's views as of any date subsequent to the date
of this material.

Additional Information and Where to Find It

In connection with the proposed transactions, Sierra intends to file
with the SEC and mail to its stockholders a Registration Statement on
Form N-14 that will include a proxy statement and that also will
constitute a prospectus of Sierra, and MCC and Medley intend to file
with the SEC and mail to their respective stockholders a proxy statement
on Schedule 14A (collectively, the "Joint Proxy Statement/Prospectus").
The definitive Joint Proxy Statement/Prospectus will be mailed to
stockholders of Sierra, MCC, and Medley, respectively. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY
AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT SIERRA, MCC, AND MEDLEY, THE
PROPOSED TRANSACTIONS AND RELATED MATTERS. When available, investors
and security holders will be able to obtain the Joint Proxy
Statement/Prospectus and other documents filed with the SEC by Sierra,
MCC, and Medley, free of charge, from the SEC's web site at
www.sec.gov
and from Sierra's website (
www.sierraincomecorp.com),
MCC's website (
www.medleycapitalcorp.com),
or Medley's website (
www.mdly.com).
Investors and security holders may also obtain free copies of the Joint
Proxy Statement/Prospectus and other documents filed with the SEC from
Sierra, MCC, or Medley by contacting Sam Anderson, Medley's Investor
Relations contact, at 212-759-0777.

Participants in the Solicitation

Sierra, MCC, and Medley and their respective directors, executive
officers, other members of their management, employees and other persons
may be deemed to be participants in the anticipated solicitation of
proxies in connection with the proposed transactions. Information
regarding Sierra's directors and executive officers is available in its
definitive proxy statement for its 2018 annual meeting of stockholders
filed with the SEC on March 14, 2018 (the "Sierra 2018 Proxy
Statement
"). Information regarding MCC's directors and executive
officers is available in its definitive proxy statement for its 2018
annual meeting of stockholders filed with the SEC on December 21, 2017
(the "MCC 2018 Proxy Statement"). Information regarding
Medley's directors and executive officers is available in its annual
report for the year ended December 31, 2017 on Form 10-K filed with the
SEC on March 29, 2018 (the "Medley 2017 10-K"). To the
extent holdings of securities by such directors or executive officers
have changed since the amounts disclosed in the Sierra 2018 Proxy
Statement, the MCC 2018 Proxy Statement, and the Medley 2017 Form 10-K,
such changes have been or will be reflected on Statements of Change in
Ownership on Form 4 filed by such directors or executive officers, as
the case may be, with the SEC. More detailed information regarding the
identity of potential participants, and their direct or indirect
interests, by security holdings or otherwise, will be set forth in the
Joint Proxy Statement/Prospectus when such documents become available
and in other relevant materials to be filed with the SEC. These
documents may be obtained free of charge from the sources indicated
above.

No Offer or Solicitation

The information in this press release is for informational purposes only
and shall not constitute an offer to sell or the solicitation of an
offer to sell or the solicitation of an offer to buy any securities or
the solicitation of any vote or approval in any jurisdiction pursuant to
or in connection with the proposed transactions or otherwise, nor shall
there be any sale, issuance or transfer of securities in any
jurisdiction in contravention of applicable law. No offer of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended.

1 Estimates of Sierra's post-merger financial position are
based on the publicly reported financial information of Sierra, MCC and
MDLY as of June 30, 2018.
2 Medley Management Inc. is
the parent company of Medley LLC and several registered investment
advisors (collectively, "Medley"). Assets under management refers to
assets of our funds, which represents the sum of the net asset value of
such funds, the drawn and undrawn debt (at the fund level, including
amounts subject to restrictions) and uncalled committed capital
(including commitments to funds that have yet to commence their
investment periods). Assets under management are as of June 30, 2018.

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