Patriot Capital takes buyout - Westfair Communications

Patriot Capital Funding Inc. agreed to a $197 million takeover offer from Prospect Capital Corp., with both companies making loans and investments to small- and mid-sized businesses.

The deal includes $111 million to retired debt held by Patriot Capital; shareholders of the Westport-based company will hold 15 percent of the stock of Prospect Capital when the deal closes, which is expected within 60 days.

Patriot Capital was co-founded in 2002 by former GE Capital manager Richard Buckanavage with backing from Compass Group Investments Inc., which is also based in Westport.

In the first quarter, Patriot Capital lost $10.5 million on $8.5 million in investment income, and closed the quarter with total assets valued at $333 million.

“The Patriot acquisition is a perfect example of our ”¦strategy to go on offense in the current opportunity-rich marketplace in which competitors have faltered with overleveraged balance sheets,” said Grier Eliasek, president of Prospect, in a prepared statement. “We are pursuing other ”˜move-the-needle”™ portfolio opportunities similar to Patriot in addition to continuing our work on individual transactions.”