CHICAGO and NEW YORK, Dec. 21, 2010 /PRNewswire-FirstCall/ -- Deerfield Capital Corp. (Nasdaq: DFR) ("DFR") and Commercial Industrial Finance Corp. ("CIFC") today announced their entry into a definitive agreement pursuant to which CIFC will merge with DFR. Following consummation of the merger, Peter Gleysteen, the Chief Executive Officer of CIFC, will become the Chief Executive Officer, and Jonathan Trutter, the Chief Executive Officer of DFR, will become Vice Chairman of the combined company, which will have its headquarters in New York and maintain operations in Chicago. The merger, which is subject to various closing conditions, including approval by DFR's stockholders, is expected to close in the first part of 2011.
DFR, through its subsidiaries, Deerfield Capital Management LLC and Columbus Nova Credit Investments Management, LLC, is a Chicago-based investment manager with approximately $9.4 billion of assets under management ("AUM") as of December 1, 2010, including approximately $5.5 billion in collateralized loan obligations ("CLOs"). Bounty Investments, LLC, an investment vehicle managed by Renova U.S. Management LLC (" Columbus Nova"), currently owns approximately 40% of the outstanding common stock of DFR. Columbus Nova has signed a voting agreement supporting the merger.
CIFC is a New York-based investment manager specializing in leveraged loan credit products with approximately $6.2 billion of AUM as of December 1, 2010, including CLO assets recently acquired from an affiliate of Primus Guaranty, Ltd. CIFC is currently owned by CIFC Parent Holdings LLC ("CIFC Parent Holdings"), which is majority-owned by funds managed by Charlesbank Capital Partners LLC, a private equity firm based in Boston ("Charlesbank").
As consideration for the merger, CIFC Parent Holdings will receive (i) 9,090,909 shares of newlyissued DFR common stock and (ii) $7.5 million in cash in three equal installments, plus certain other consideration set forth in the agreements governing the merger.Material benefits of the merger include:
- Significant advantages of scale, synergies and market positioning with a leading track record
- Combined AUM of approximately $15.6 billion, including CLO AUM of $11.7 billion
- Improved profitability, cash flow and financial strength