Item 8.01. Other Events.
On September 21, 2021, the Board of Directors (the "Board") of Sierra Income
Corporation (the "Company" or "Sierra")) approved the suspension of the
Company's distribution reinvestment plan (the "DRIP") pursuant to an Agreement
and Plan of Merger by and among the Company, Barings BDC, Inc. ("BBDC"), Mercury
Acquisition Sub, Inc. and Barings LLC under which the Company will merge with
and into BBDC, subject to approval of the stockholders of the Company and BBDC.
As a result, beginning with the Company's first distribution following the
September 2021 distribution, any distributions declared by the Company will be
paid in cash to all stockholders unless and until the DRIP is reinstated.
In accordance with the terms of the DRIP, the Company is distributing a letter
to its stockholders regarding the suspension of the DRIP. A copy of the form of
the letter to the Company's stockholders is attached as Exhibit 99.1 to this
Current Report on Form 8-K, and is incorporated by reference herein.
Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements," which are
statements other than statements of historical facts, are not guarantees of
future performance or results of BBDC, Sierra, or, following the Mergers, the
combined company, and involve a number of risks and uncertainties, including
statements regarding the completion of the proposed transactions between BBDC
and Sierra contemplated by the Merger Agreement (the "Transaction") and the
timing and amount of any distributions in the future. Such forward-looking
statements may include statements preceded by, followed by or that otherwise
include the words "may," "might," "will," "intend," "should," "could," "can,"
"would," "expect," "believe," "estimate," "anticipate," "predict," "potential,"
"plan" or similar words. Actual results may differ materially from those in the
forward-looking statements as a result of a number of factors, including those
described from time to time in filings made by BBDC or Sierra with the
Securities and Exchange Commission ("SEC"), including those contained in the
Proxy Statement (as defined below), when such documents become available.
Certain factors could cause actual results and conditions to differ materially
from those projected, including the uncertainties associated with (i) the timing
or likelihood of the Transaction closing; (ii) the expected synergies and
savings associated with the Transaction; (iii) the expected elimination of
certain expenses and costs due to the Transaction; (iv) the percentage of
Sierra's stockholders voting in favor of the Transaction; (v) the percentage of
BBDC's stockholders voting in favor of the relevant Proposals (as defined
below); (vi) the possibility that competing offers or acquisition proposals for
Sierra will be made; (vii) the possibility that any or all of the various
conditions to the consummation of the Transaction may not be satisfied or
waived; (viii) risks related to diverting the attention of BBDC's management or
Sierra's management from ongoing business operations; (ix) the risk that
stockholder litigation in connection with the Transaction may result in
significant costs of defense and liability; (x) the future operating results of
the combined company or BBDC's, Sierra's or the combined company's portfolio
companies; (xi) regulatory approvals and other factors; (xii) changes in
regional or national economic conditions, including but not limited to the
impact of the COVID-19 pandemic, and their impact on the industries in which
BBDC and Sierra invest; (xiii) changes to the form and amounts of Sierra's tax
obligations; (xiv) fluctuations in the market price of BBDC's common stock; (xv)
the Transaction's effect on the relationships of BBDC or Sierra with their
respective investors, portfolio companies, lenders and service providers,
whether or not the Transaction is completed; (xvi) the reduction in BBDC's
stockholders' and Sierra's stockholders' percentage ownership and voting power
in the combined company; (xvii) the challenges and costs presented by the
integration of BBDC and Sierra; (xviii) the uncertainty of third-party
approvals; (xix) the significant Transaction costs; (xx) the restrictions on
BBDC's and Sierra's conduct of business set forth in the Merger Agreement; and
(xxi) other changes in the conditions of the industries in which BBDC and Sierra
invest and other factors enumerated in BBDC's and Sierra's filings with the SEC.
You should not place undue reliance on such forward-looking statements, which
are and will be based upon BBDC management's and Sierra management's respective
then-current views and assumptions regarding future events and operating
performance, and speak only as of the date any such statement is made. Neither
BBDC nor Sierra undertakes any duty to update any forward-looking statement made
herein. All forward-looking statements speak only as of the date of this Current
Report on Form 8-K.
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Additional Information and Where to Find It
This communication relates to a proposed business combination involving BBDC and
Sierra, along with related proposals for which stockholder approval will be
sought (collectively, the "Proposals").
In connection with the proposed Transaction, BBDC and Sierra plan to file with
the SEC and mail to their respective stockholders a joint proxy statement on
Schedule 14A (the "Proxy Statement"), and BBDC plans to file with the SEC a
registration statement on Form N-14 (the "Registration Statement") that will
include the Proxy Statement and a prospectus of BBDC. The Proxy Statement and
the Registration Statement will each contain important information about BBDC,
Sierra, the proposed Transaction and related matters. STOCKHOLDERS OF EACH OF
BBDC AND SIERRA ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY ALL RELEVANT
DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT AND THE REGISTRATION
STATEMENT WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
THERETO, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BBDC, SIERRA, THE
TRANSACTION AND THE PROPOSALS. Investors and security holders will be able to
obtain the documents filed with the SEC free of charge at the SEC's web site at
http://www.sec.gov and, for documents filed by BBDC, from the BBDC website at
http://www.baringsbdc.com or for documents filed by Sierra, from the Sierra
website at http://www.sierraincomecorp.com.
Participants in the Solicitation
BBDC and Sierra and their respective directors, executive officers and certain
other members of management and employees of Barings, SIC Advisors LLC and their
respective affiliates, may be deemed to be participants in the solicitation of
proxies from the stockholders of BBDC and Sierra in connection with the
Proposals. Information about the directors and executive officers of BBDC is set
forth in its proxy statement for its 2021 annual meeting of stockholders, which
was filed with the SEC on March 26, 2021. Information about the directors and
executive officers of Sierra is set forth in its proxy statement for its 2021
annual meeting of stockholders, which was filed with the SEC on April 28, 2021.
Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of BBDC's and Sierra's stockholders
in connection with the Proposals will be contained in the Proxy Statement and
other relevant materials to be filed with the SEC when such documents become
available. Investors should read the Proxy Statement and Registration Statement
carefully and in their entirety when they become available before making any
voting or investment decisions. These documents may be obtained free of charge
from the sources indicated above.
No Offer or Solicitation
This Current Report on Form 8-K is not, and under no circumstances is it to be
construed as, a prospectus or an advertisement and the communication of this
Current Report on Form 8-K is not, and under no circumstances is it to be
construed as, an offer to sell or a solicitation of an offer to purchase any
securities in BBDC, Sierra or in any fund or other investment vehicle. No offer
of securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
99.1 Letter to Stockholders Suspending the Company's Distribution Reinvestment Plan.
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