PE-backed National Surgical Healthcare pulls in $52.5 mln

Franklin Square Capital Partners has provided $52.5 million in financing to National Surgical Healthcare, which owns and operates surgical hospitals and ambulatory surgery centers in the U.S. The capital infusion is backing NSH’s acquisition of a majority stake in Optim Healthcare, a provider of healthcare services. NSH is backed by Irving Place Capital.

PRESS RELEASE

PHILADELPHIA, June 8, 2015 /PRNewswire/ — Franklin Square Capital Partners, the largest manager of business development companies (BDCs), announced the origination by three of its BDCs of a $52.5 million second lien senior secured note to National Surgical Healthcare (NSH), a leading owner and operator of surgical hospitals and ambulatory surgery centers in the United States. NSH is a portfolio company of Irving Place Capital (IPC), a New York, NY based private equity firm focused on buyout and growth capital investments across the middle market.

The financing was provided by FS Investment Corporation (NYSE: FSIC), FS Investment Corporation II (FSIC II) and FS Investment Corporation III (FSIC III), BDCs managed by affiliates of Franklin Square and sub-advised by an affiliate of GSO Capital Partners LP (GSO). The financing supports NSH’s acquisition of a majority interest in Optim Healthcare, a physician led provider of general and specialty healthcare services. The transaction also supports NSH’s acquisition of additional equity ownership in one of its existing surgical facilities.

“The lending capacity across our BDCs makes it possible to tailor financing for strong middle market companies like National Surgical Healthcare,” said Michael C. Forman, Chairman and Chief Executive Officer of FSIC, FSIC II and FSIC III. “We are pleased to work with Irving Place Capital to support NSH’s growth.”

“NSH exhibits consistent revenue growth, strong free cash flow characteristics and clinical excellence,” commented Brad Marshall, Senior Managing Director at GSO and the senior portfolio manager of FSIC, FSIC II and FSIC III. “We believe that given its unique operating model focused on non-emergency scheduled procedures, combined with exceptional patient outcomes, the company is well positioned to further expand its healthcare footprint.”

“The continued support of IPC combined with the certainty of execution provided by Franklin Square’s funds will be instrumental in achieving our growth strategy of partnering with surgical facilities with a strong market presence,” said David Crane, Chairman and Chief Executive Officer of National Surgical Healthcare.

About FSIC
FSIC is a publicly traded BDC focused on providing customized credit solutions to private middle market U.S. companies. FSIC seeks to invest primarily in the senior secured debt and, to a lesser extent, the subordinated debt of private middle market companies to achieve the best risk-adjusted returns for its investors. In connection with its debt investments, FSIC may receive equity interests such as warrants or options.

FSIC is advised by FB Income Advisor, LLC, an affiliate of Franklin Square, and is sub-advised by GSO / Blackstone Debt Funds Management LLC (GDFM), an affiliate of GSO. GSO, with approximately $75.0 billion in assets under management as of March 31, 2015, is the credit platform of Blackstone, one of the world’s leading managers of alternative investments. For more information, please visit www.fsinvestmentcorp.com.

About FSIC II and FSIC III
FSIC II and FSIC III are publicly registered, non-traded BDCs sponsored by Franklin Square. FSIC II and FSIC III focus primarily on investing in the debt securities of private companies throughout the United States, with the investment objectives of generating current income and, to a lesser extent, long-term capital appreciation for their investors. FSIC II and FSIC III are advised by affiliates of Franklin Square and are sub-advised by GDFM. For more information, please visit www.franklinsquare.com.

About Franklin Square
Franklin Square is a leading manager of alternative investment funds designed to enhance investors’ portfolios by providing access to asset classes, strategies and asset managers that typically have been available to only the largest institutional investors. The firm’s funds offer “endowment-style” investment strategies that help construct diversified portfolios and manage risk. Franklin Square strives not only to maximize investment returns but also to set the industry standard for best practices by focusing on transparency, investor protection and education for investment professionals and their clients.

Founded in Philadelphia in 2007, Franklin Square quickly established itself as a leader in the world of alternative investments by introducing innovative credit-based income funds, including the industry’s first non-traded BDC. The firm managed approximately $15.7 billion in assets as of March 31, 2015, and is the largest manager of BDC assets with approximately $14.5 billion in assets under management as of March 31, 2015. For more information, please visit www.franklinsquare.com.

About National Surgical Healthcare
NSH is an innovative healthcare partner, based in Chicago, Illinois, that empowers physicians to thrive in a changing marketplace. A leader in clinical outcomes, NSH partners with leading orthopedic surgeons and neurosurgeons in its facilities across the country to provide cost-efficient, high-quality patient care. NSH is an Irving Place Capital portfolio company. For more information about NSH, visit the company’s website at www.nshinc.com.

About Irving Place Capital
Based in New York City, IPC is a middle-market private equity firm that invests in buyouts, recapitalizations, and growth capital opportunities. The firm focuses on making control or entrepreneur-driven investments in retail and consumer, industrial and packaging companies where it can apply its substantial operating and strategic resources and expertise to enhance value. Since its formation in 1997, IPC has been an investor in 60 companies and has raised over $4 billion of equity capital. For more information please go to www.irvingplacecapital.com.
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