Sygnus Credit Investments (SCI) through its newly formed subsidiary SCI Puerto Rico Inc., entered into a stock purchase agreement to acquire a majority interest in Acrecent Financial Corporation (AFC), one of the largest private credit companies in Puerto Rico.  

The deal was signed off on Wednesday (December 22). Completion of the acquisition is subject to approval by the Puerto Rican regulator, the Office of the Commissioner of Financial Institutions. 

The executive management team of AFC will remain partners with SCI. The proposed acquisition is aligned with SCI’s strategy of providing alternative financing to middle‑market businesses across the Caribbean region.

The transaction will represent SCI’s first acquisition and the largest single investment in SCI’s history. Pan American Finance, a financial advisory firm based in Miami, Florida, and Sygnus Capital were joint financial advisors to SCI on the acquisition.  

Dorsey & Whitney LLP and O’Neill & Borges LLC acted as legal advisors to SCI, and EY Caribbean as Financial, Tax and IT advisors. Acrecent’s financial advisor was Multicultural Capital LLC, and it was represented by the law firms Venable LLP and Pietrantoni Mendez & Alvarez LLC.

Positive views about the acquisition

Commenting on the deal, Berisford Grey, CEO of Sygnus Capital Investment stated, “SCI is breaking new barriers with the announced acquisition of its majority stake in AFC which operates within a US$100 billion economy and US territory. To put this into perspective, the total GDP of SCI’s entire Caribbean footprint in 8 territories up to this point is less than US$50 billion. Thus, this acquisition will provide three key benefits to SCI and its shareholders.”

These are (i) an opportunity to build international relationships to reimagine the growth and size of the business (ii) an opportunity to expand its credit portfolio into fast-growing industries such as healthcare and biopharma, which are inaccessible within its current markets and (iii) an opportunity to deepen the diversification of its investment portfolio in terms of higher asset quality, geography and sector thus increasing downside protection while enhancing shareholder value.  

He added that, “SCI is very pleased to be entering into this partnership with AFC and its fantastic team of professionals, led by CEO James Connor. We share mutual values across our teams and have similar cultures that will help us to collectively grow the combined business to new frontiers.”

For his part, James Connor, CEO and founding partner of Acrecent, also expressed his positive thoughts on the acquisition saying, “I am very enthused for my team at Acrecent to join the entrepreneurial Sygnus team and together becoming the Caribbean’s formidable alternative investment force, raising and deploying transformational capital at scale in Puerto Rico and across Sygnus’ rapidly expanding Caribbean footprint.”

Dr. Ike Johnson, Executive Vice President of Sygnus and Head of Private Equity and Mergers & Acquisitions explained that, “the AFC acquisition represents a truly unique value proposition for SCI, making it unquestionably the Caribbean’s largest private credit investment company with more than US$160 million in private credit investments and more than US$200 million in assets under administration.”

He said SCI is truly happy and grateful to have partnered with Pan American Finance, which was instrumental in securing the winning bid and working to get such an exciting deal executed.

About Acrecent Financial

AFC was founded in 2003 and is a private credit investment company that operates in Puerto Rico, a territory of the United States. It is a licensed financing and leasing company focused primarily on the senior secured private credit market for small and middle-market businesses in Puerto Rico.  The pharmaceutical industry in Puerto Rico accounts for 30 per cent of its GDP and US$44 billion in annual exports. 

AFC has a private credit portfolio > US$60 million and assets under administration > US$125 million. The company is led by a very experienced team with an impressive track record in credit management.

The senior managers have had extensive careers in the commercial finance industry, primarily from GE Capital in the US and Mexico, and Banco Popular in Puerto Rico.