I have covered Prospect Capital Corporation (NASDAQ:PSEC) a few times in the past. There is now another piece of good news that I would like to share regarding the company. For those who are reading about the company for the first time, allow me to provide a brief introduction.
Prospect Capital is a business development company. Basically, it helps fund new enterprises in the hopes of getting a return. Think of it as a loan shark for lack of a better word. It specializes in middle market, mature, mezzanine finance, later stage, emerging growth, buyouts, recapitalizations, turnaround, growth capital, development, subordinated debt tranches of collateralized loan obligations, cash-flow term loans, and bridge transactions. It also makes real estate investments particularly in multi-family residential real estate asset class. The fund makes secured debt, senior debt, unitranche debt, first-lien and second lien, private debt, mezzanine debt, and equity investments in private and microcap public businesses.
It typically invests across all industry sectors, with a particular expertise in the energy and industrial sectors. The fund invests in aerospace and defense, chemicals, conglomerate services, consumer services, ecological, electronics, financial services, machinery, manufacturing, media, pharmaceuticals, retail, software, specialty minerals, textiles and leather, transportation, oil and gas production, coal production, materials, industrials, consumer discretionary, information technology, utilities, pipeline, storage, power generation and distribution, renewable and clean energy, oilfield services, healthcare, food and beverage, education, business services, and other select sectors. It prefers to invest in the United States and Canada.
The fund seeks to invest between $10 million to $250 million per transaction in companies with EBITDA between $5 million and $150 million, sales value between $25 million and $500 million, and enterprise value between $5 million and $1.0 billion.