Canadian specialty finance firm Crown Capital Partners said Norrep Credit Opportunities Fund II (NCOF II) has been closed with the recent repayment of a special situations loan to CRH Medical Corp. The fund, established in 2012, invested approximately $81.5 million in five companies. NCOF II generated a gross internal rate of return of about 24 percent and a multiple of invested capital of about 1.5x with its close. Crown was the fund’s manager, holding a 53.6 percent interest. Based in Calgary and Toronto, Crown is currently investing from Crown Capital Fund IV, which has deployed about $170 million to date.
Photo: (left) Chris Johnson, president and CEO of Crown Capital Partners.
Crown Capital Partners Announces Completion of NCOF II
Fund generated a gross IRR of 24%
CALGARY, July 10, 2017 /CNW/ – Crown Capital Partners Inc. (“Crown” or the “Corporation”) (TSX: CRWN), which provides growth capital to successful mid-market companies, today announced that Norrep Credit Opportunities Fund II, LP and Norrep Credit Opportunities Fund II (Parallel), LP (collectively, “NCOF II”) have been closed following the recent repayment of the special situations loan to CRH Medical Corporation, which represented the final remaining investment in NCOF II. Crown was the manager of NCOF II and held a 53.6% interest in aggregate.
NCOF II was established in 2012, closed its first loan in December 2012 and invested approximately $81.5 million in five companies: Genalta Power Inc., Claude Resources Inc., Questrade Inc., CRH Medical Corporation, and Corrosion Service Company. NCOF II generated a gross IRR of approximately 24% and a multiple of approximately 1.5X(1).
“The loans in this portfolio performed well for our investors, adding to Crown’s outstanding 17-year track record in mid-market lending,” said Chris Johnson, President and CEO of Crown. “There is a significant unmet need for customized financing solutions aimed at the mid-market, and we are building on our track record to expand Crown’s presence and asset base, both directly and through our fund management business.”
The completion of NCOF II has triggered payment of $4.3 million of performance fees to Crown, as manager of NCOF II. Prior to the closing of its initial public offering (“IPO”), Crown committed to pay 100% of the performance fee distributions accrued to June 30, 2015 to the Pre-IPO plan participants. In addition, Crown’s current compensation policy provides that 50% of such performance fee distributions earned will be distributed to the employees. As such, Crown has retained approximately $1.0 million of the performance fees.
Crown’s current special situations fund, Crown Capital Fund IV, LP, has deployed approximately $170 million of the targeted $300 million.
Crown (TSX: CRWN) is a specialty finance company focused on providing capital to successful Canadian and select U.S. companies that are unwilling or unable to obtain suitable financing from traditional capital providers such as banks and private equity funds. Crown also manages capital pools, including some in which Crown has a direct ownership interest. Crown originates, structures and provides tailored special situation and long-term financing solutions to a diversified group of private and public mid-market companies in the form of loans, royalties and other structures with minimal or no ownership dilution.
“Gross IRR” means the gross internal rate of return generated from an investment before consideration of management fees and expenses and is calculated based on an investment’s realized amounts and unrealized amounts (cash distributions) and actual cash outflows made in respect of an investment, with timing based on when such distributions occurred or are likely to occur. It is then calculated by determining the discount rate that will bring all cash distributions (realized and unrealized) to a net present value of zero.
“Multiple” is calculated as total combined proceeds divided by the aggregate investment amount
For further information: Craig Armitage, Investor Relations, firstname.lastname@example.org, (416) 347-8954
Photo courtesy of Crown Capital Partners