Runway Growth Finance (RWAY) M&A Announcement summary

Deal rationale and strategic fit

• Expands healthcare and life sciences exposure from 14% to 31% of the loan portfolio, accelerating diversification and portfolio optimization.

• Advances diversification, scale, and access to a $10 billion credit platform, supporting both organic and inorganic growth strategies.

• Adds high-quality, complementary assets and reduces average loan size, enhancing investment and deal sourcing capabilities.

• Enhances financial profile through NII accretion, operational efficiency, and optimized leverage.

• Provides a repeatable, non-dilutive blueprint for future M&A-driven expansion.

Financial terms and conditions

• NAV-for-NAV merger structured as a tax-free reorganization with an estimated purchase price of approximately $220 million based on June 30, 2025 financials.

• Consideration includes about $145 million in cash, $75.5 million in shares valued at closing NAV/share, and a $9 million cash payment from the external adviser for SWK stockholders.

• Final purchase price determined by NAV calculations 48 hours prior to closing.

• Transaction expected to close by year-end 2025 or early Q1 2026, pending shareholder and regulatory approvals.

Synergies and expected cost savings

• Anticipated mid-single-digit NII accretion in the first full quarter post-close.

• Greater expense efficiency, improved dividend coverage, and enhanced ROE and leverage ratio expected from increased scale.

• Operational efficiency and lower funding costs projected.

• Improved trading liquidity and broader shareholder base anticipated.

• Lower risk profile through sector diversification and smaller average loan size.