Prospect Capital buying First Tower for $266M
by Associated Press
Published: March 20,2012
FLOWOOD — Investment firm Prospect Capital Corp. said Tuesday it will pay about $266 million to acquire an 80.1 percent stake in First Tower, a specialty finance company.
Prospect Capital said it will pay $110.2 million in cash for the Flowood-based company, and said First Tower shareholders will get 14.5 million shares of Prospect as part of the deal. That would give First Tower’s shareholders an 11 percent stake in Prospect Capital. However, Prospect said it will have the option to pay cash instead of issuing the stock.
First Tower has about 150 branch offices in Mississippi, Louisiana, and Missouri, and it plans to expand to other markets. It has 550 employees.
Shares of Prospect Capital closed at $10.76 Monday. The New York company said its offer values First Tower at $333 million. Prospect said the deal should close in two to four months.
In morning trading Tuesday, Prospect Capital stock declined 4 cents to $10.72. Its shares have recovered after hitting a low of $7.41 in early August but are 12 percent below their 52-week high of $12.30 set in early April 2011.
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