According to the Complaint, NewStar is an internally-managed, commercial finance company with $7.3 billion of assets managed across two complementary business lines: middle market direct lending and asset management.
The Company’s direct lending activities are focused on meeting the complex financing needs of companies and private investors in the middle markets through specialized lending groups that offer a range of flexible debt financing options.
Credit investments are originated directly through teams of experienced, senior bankers and marketing officers organized around key industry and market segments.
Through its asset management platforms, NewStar offers a range of investment products employing credit-oriented strategies focused on middle market loans and liquid, tradeable credit. The Company manages approximately $2.0 billion of assets in a series of private credit funds that co-invest in middle market loans originated through its established leveraged finance lending platform.
Through its wholly-owned subsidiary, the Company also has more than $2 billion of assets managed across a series of CLOs that invest primarily in broadly syndicated, non-investment grade loans, as well as other sponsored funds and managed accounts that invest across various asset classes, including non-investment grade loans and bonds.
This action stems from a proposed transaction announced on October 17, 2017 (the “Proposed Transaction”), pursuant to which NewStar Financial, Inc. (“NewStar” or the “Company”) will be acquired by affiliates of First Eagle Investment Management, LLC. On October 16, 2017, NewStar’s Board of Directors (the “Board” or “Individual Defendants”) caused the Company to enter into an agreement and plan of merger (the “Merger Agreement”) with First Eagle Holdings, Inc. (“Parent”), FE Holdco, LLC (“FE Holdco”), and FE Merger Sub, Inc. (“Merger Sub,” and together with First Eagle, FE Holdco, and First Eagle Investment Management, LLC, “First Eagle”). Under the terms of the Merger Agreement, shareholders of NewStar will receive $11.44 per share in cash and one contractual contingent value right (“CVR”).
On November 30, 2017, defendants filed a proxy statement (the “Proxy Statement”) with the United States Securities and Exchange Commission (“SEC”) in connection with the Proposed Transaction.
The Complaint alleges that the Proxy Statement, which scheduled a stockholder vote on the Proposed Transaction for December 21, 2017, omits material information with respect to the Proposed Transaction, which renders the Proxy Statement false and misleading.
This case was voluntarily dismissed on December 22, 2017.