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180 Degree Capital Corp. Issues Q4 2024 Shareholder Letter
TURN180 Degree Capital (TURN) GlobeNewswire·2025-02-14 12:30

Core Viewpoint - 180 Degree Capital Corp. has announced a definitive agreement to merge with Mount Logan Capital Inc., which is seen as a strategic move to transition into an operating company and unlock value for shareholders [1][2][4]. Company Overview - 180 Degree Capital Corp. is a publicly traded registered closed-end fund focused on investing in undervalued small publicly traded companies [15]. - Mount Logan Capital Inc. has approximately 2.4billioninassetsundermanagementasofSeptember30,2024,whichisexpectedtogeneratepredictablefeerevenue[5].BusinessCombinationDetails−Theproposedbusinesscombinationisviewedasauniqueopportunityfor180DegreeCapitaltodifferentiateitselffromotherclosed−endfunds[2].−Thecombinationaimstoshiftthevaluationfromnetassetvaluetooperatingmetrics,potentiallyincreasingthecompany′smarketvaluation[5].−ThemergerisexpectedtoprovideoperationalleverageanduniqueinvestmentaccessthroughBCPartners,enhancingeconomiesofscale[5].ShareholderSupport−Approximately272.4 billion in assets under management as of September 30, 2024, which is expected to generate predictable fee revenue [5]. Business Combination Details - The proposed business combination is viewed as a unique opportunity for 180 Degree Capital to differentiate itself from other closed-end funds [2]. - The combination aims to shift the valuation from net asset value to operating metrics, potentially increasing the company's market valuation [5]. - The merger is expected to provide operational leverage and unique investment access through BC Partners, enhancing economies of scale [5]. Shareholder Support - Approximately 27% of outstanding shares are supported by large shareholders who have signed voting agreements or provided non-binding indications of support for the business combination [7]. Historical Performance - Since the inception of 180 Degree Capital, the company has made significant changes, including reducing operating expenses by 44% from 6.0 million in June 2016 to $3.5 million in December 2024 [8]. - The percentage of private investments has decreased from 86% in June 2016 to less than 1% in December 2024, while public investments have increased from 14% to over 99% in the same period [8]. Future Outlook - The management team expresses strong confidence in the future of the combined entity and believes the business combination will create long-term shareholder value [4][14].