Business Context and Reporting Period
FS KKR Capital Corp. (formerly FS Investment Corporation) filed this Form 8-K on December 19, 2018, to report the completion of its acquisition of Corporate Capital Trust, Inc. (CCT). The transaction was executed pursuant to a Merger Agreement dated July 22, 2018. Concurrently with the merger, the Company officially changed its name from FS Investment Corporation to FS KKR Capital Corp.
Key Financial Metrics and Transaction Details
This filing is a current report regarding a corporate event and does not contain audited financial statements, revenue, profit, cash flow, or margin data for the reporting period. The primary financial metric disclosed relates to the transaction structure:
- Exchange Ratio: Each outstanding share of CCT common stock was converted into the right to receive 2.3552 shares of the Company's common stock.
- Share Issuance: The Company issued an aggregate of approximately 292,326,586 shares of its common stock to former CCT stockholders (prior to adjustments for fractional shares paid in cash).
- Pro Forma Data: Unaudited pro forma condensed consolidated financial information is referenced as Exhibit 99.2 but is not included in the text of this filing.
Material Changes Versus Prior Period
The filing details significant structural and governance changes effective December 19, 2018:
- Corporate Structure: CCT was merged into a wholly-owned subsidiary of the Company and then into the Company itself, with the Company as the surviving entity.
- Board Composition: The Board of Directors expanded from 9 to 11 members. Four directors (Gregory P. Chandler, Barry H. Frank, Philip E. Hughes, Jr., and Pedro Ramos) resigned, and six new directors (Barbara Adams, Frederick Arnold, Brian R. Ford, Richard Goldstein, Jerel A. Hopkins, and James H. Kropp) were qualified for office.
- Corporate Name: The Company's name was legally amended from FS Investment Corporation to FS KKR Capital Corp.
Guidance, Outlook, and Risks
The filing includes standard forward-looking statements regarding the future performance of the combined entity. Management cautions that actual results may differ materially from projections due to various factors, including:
- Economic changes and conditions in the operating area.
- Risks associated with terrorism or natural disasters.
- Changes in laws or regulations.
- Unexpected costs or expenses resulting from the business combination.
- Failure to realize anticipated benefits of the Merger.
The filing explicitly states that the pro forma financial information is for illustrative purposes only and does not necessarily indicate the results of operations or financial position that would have resulted had the merger been completed at the beginning of the applicable period.
Important Facts for Investor Verification
- Verify the exact number of shares issued to former CCT stockholders after accounting for cash payments in lieu of fractional shares.
- Review the Unaudited Pro Forma Condensed Consolidated Financial Information (Exhibit 99.2) to understand the projected financial impact of the merger.
- Confirm the full text of the Merger Agreement (Exhibit 2.1) for detailed terms and conditions not summarized in this report.
- Monitor the integration progress and the realization of anticipated synergies from the combination of FS KKR Capital Corp. and CCT.