Hercules Capital, Inc - Portfolio Company Update

Posted by Sean Riddell on Jun 29, 2017 4:48:56 PM
Hercules Capital, Inc (NYSE: HTGC)  a provider of debt and equity growth capital to technology and life science companies at all stages of development, mostly privately help start-ups backed by leading venture capital and private equity firms has disclosed the following milestones and liquidity events:
Hercules Capital, Inc - Portfolio Company Update
IronPlanet, Inc., an online dealer for pre-owned heavy-duty vehicles and construction equipment was bought out by Ritchie Bros. Auctioneers Incorporated (NYSE &TSX: RBA), the largest industrial equipment broker for $758,500,000 USD.  Finalized on May 31, 2017, the deal was in part financed by Hercules back in October of 2014 with a debt commitment of $37,500,000 USD.  A profitable venture, Hercules secured a fully realized IRR of 37.9%, translating to approximately $5,100,000 USD.
Lithium Technologies, Inc., a San Francisco based provider of software dedicated to connecting businesses to consumers on social media and other conduits has agreed to be acquired by Vista Equity Partners, a private equity firm focused in the technology space.  Approved by Lithium's board on May 30th, 2017, Hercules had already devoted an initial debt financing of $25,500,000 USD in November of 2016.
SOASTA, Inc., a privately held tech company that provides cloud based testing services and products, was acquired by Akamai Technologies, Inc (NASDAQ: AKAM), a leader in providing delivery services for media, software, and cloud security.  Hercules had devoted $18,500,000 USD in August 2014, and has since seen an IRR of 9.9%.
Merrimack Pharmaceuticals, Inc (NASDAQ: MACK) Finished a sale of assets to Ispen S.A. (Euronext: IPN; ADR:IPSEY) to pay off $175,000,000 USD in outstanding Senior Secured Notes maturing in 2022.  On top of this, Merrimack's Board of Directors has approved a cash dividend on common stock of $140,000,000 USD, coming from the proceeds of the Ispen S.A. deal.  The dividend was paid out on May 26, 2017, written as paid our at the close of business on May 17th, 2017.
Mast Therapeutics, Inc. confirmed the finalization of a merger with Savara Inc (NASDAQ: SVRA), a privately help, clinical stage specialty pharmaceutical company focused on the development and commercialization of novel therapies for the treatment of serious or life threatening rare respiratory diseases.  Hercules had invested $15,000,000 USD in venture debt financing in August 2015 towards this deal which would combine the operations of Mast and Savara, while making Savara stockholders majority owners of Mast.  Hercules outstanding principal balance on the deal is $3,000,000 USD and warrants for 2,300,000 shares as of March 31, 2017.  Savara Inc., under the direction of Savara's current management team, will sport three inhaled product candidates in the advanced stages of development.  
JumpStart Games, Inc., a designer and producer of educational mobile and multiplayer online games for children, has agreed to a merger with an unknown company in an effort to repair a previous loan.  Hercules had invested $13,000,000 USD to JumpStart in March 2014.
Jaguar Animal Health, Inc (NASDAQ: JAGX), a company committed to identifying animal health market opportunities where they can develop species specific products has agreed to a binding merger with Napo Pharmaceuticals, a company that focuses on the development and commercialization of proprietary pharmaceuticals for the global marketplace.  Related are the two Orphan Drug Designation Applications Jaguar Animal Health and Napo Pharmaceuticals have made with the U.S. Food & Drug Administration for Mytesi (formerly Fulyzaq) to treat unmet medial needs.  When the merger is finalized, Jaguar Animal Health will change it's name to Jaguar Health, Inc, and Napo will become a wholly-owned, human health focused, subsidiary.  Expectations place the merger finalizing at the end of July 2017.
IPO Activities
As of June 29, 2017, there are five portfolio companies that have filed Registration Statements for potential IPOs that Hercules currently holds positions in.  However, there is no guarantee that a company which has filed for an IPO will complete that IPO.

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