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Prospect Capital makes USD35m secured debt investment in Shearer’s

Prospect Capital has made a secured debt investment of USD35m in Shearer’s Foods, a manufacturer and distributor of snack food products based in Brewster, Ohio, to support the acquisition of Snack Alliance.

Founded in 1974, Shearer’s is the largest producer of kettle cooked potato chips in the US.

Shearer’s also produces traditional potato chips, tortilla chips, cheese curls, and other snack products.

The company serves a blue-chip list of co-pack, branded, private label, and food service customers.

Robert Shearer, the company’s chief executive officer and the former chairman of the board of directors for the Snack Food Association, has played a leadership role in the industry for decades. Shearer’s has been majority owned since 2008 by Mistral Equity Partners, a private equity firm based in New York.

Prospect’s secured junior debt, along with first lien debt from a lender syndicate, is being used to support the acquisition by Shearer’s of Snack Alliance, a manufacturer and distributor of branded and private label snack food products with many products in the "better-for-you" category.

Prospect’s new debt investment replaces Prospect’s prior USD18m debt investment in Shearer’s.

In conjunction with the debt investment, Prospect also made an additional equity co-investment in Shearer’s to support the acquisition.

"The Shearer’s transaction represents another successful example of our continued growth in our sponsor finance business, where we are generating significant transaction volume from private equity groups because of our flexible financing structures," says David Moszer, a senior professional with Prospect Capital Management.

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