Acquisition of Golub Capital BDC 3, Inc.

9 Months Ended

Jun. 30, 2024

Business Combination and Asset Acquisition [Abstract]

Acquisition of Golub Capital BDC 3, Inc.

Note 13. Acquisition of Golub Capital BDC 3, Inc.

On June 3, 2024, the Company completed its previously announced acquisition of GBDC 3. In accordance with the terms of the GBDC 3 Merger Agreement, at the effective time of the GBDC 3 Merger, each outstanding share of GBDC 3 common stock was converted into the right to receive 0.9138 shares of common stock, par value $0.001 per share of the Company (with GBDC 3 stockholders receiving cash in lieu of fractional shares of the Company’s common stock). As a result of the GBDC 3 Merger, the Company issued an aggregate of 92,115,308 shares of its common stock to former GBDC 3 stockholders.

The GBDC 3 Merger was accounted for in accordance with the asset acquisition method of accounting as detailed in ASC Topic 805. The fair value of the merger consideration paid and transaction costs incurred to complete the GBDC 3 Merger by the Company was allocated to the assets acquired and liabilities assumed, based on their relative fair values as of the date of acquisition and did not give rise to goodwill. The excess of merger consideration paid over the fair value of net assets acquired is considered the purchase premium. Immediately following the acquisition of GBDC 3, the Company recorded its assets at their respective fair values and, as a result, the purchase premium allocated to the cost basis of the GBDC 3 assets acquired was immediately recognized as unrealized depreciation on the Company's Consolidated Statement of Operations. The purchase premium allocated to investments in loan securities will amortize over the life of the loans through interest income with a corresponding reversal of the unrealized depreciation on the GBDC 3 loans acquired through their ultimate disposition. The purchase premium allocated to investments in equity securities, will not amortize over the life of the equity securities through interest income and, assuming no subsequent change to the fair value of the GBDC 3 equity securities acquired and disposition of such equity securities at fair value, the Company will recognize a realized loss or a reduction in realized gains with a corresponding reversal of the unrealized depreciation upon disposition of the GBDC 3 equity securities acquired.

The merger was considered a tax-free reorganization and the Company has elected to carry forward the historical cost basis of the GBDC 3 investments for tax purposes. The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed as a result of the GBDC 3 Merger:

Common stock issued by the Company(1)	$	1,526,351
Transaction costs	3,867
Total purchase price	$	1,530,218
Assets acquired:
Investments, at fair value (amortized cost of $2,675,051)	$	2,623,381
Cash and cash equivalents(2)	53,885
Interest receivable	32,204
Other assets	15,409
Total assets acquired	$	2,724,879
Liabilities assumed:
Debt	1,211,174
Other liabilities(3)	35,156
Total liabilities assumed	1,246,330
Net assets acquired	1,478,549
Total purchase premium	$	51,669

(1)Based on the most recent market price at closing of $16.57 and the 92,115,308 shares of common stock issued by the Company in conjunction with the GBDC 3 Merger.

(2)Includes $46,067 of restricted cash and cash equivalents, $373 of foreign restricted cash and cash equivalents and $1,064 of foreign cash and cash equivalents.

(3)Includes $4,651 of management fees and $4,271 of incentive fees accrued by GBDC 3 through the closing date of the GBDC 3 Merger pursuant to an investment advisory agreement between GBDC 3 and the Investment Adviser, which was terminated upon the closing of the GBDC 3 Merger. The payable for these fees was assumed by the Company and paid by the Company to the Investment Adviser in July 2024.