Runway Growth Finance Announces Acquisition of SWK Holdings to Expand Healthcare Investment Portfolio

Runway Growth Finance Corp. has entered into a definitive merger agreement to acquire SWK Holdings Corp., a life science focused specialty finance company. The transaction represents a strategic move to diversify and optimize Runway Growth's investment portfolio while adding significant scale to its operations. The acquisition is valued at approximately $220 million and is structured as a net asset value-for-NAV merger.

David Spreng, Runway Growth's Founder and CEO, emphasized that this transaction meaningfully advances the company's strategy to diversify and optimize its portfolio by adding SWK's high-quality investments in healthcare and life sciences. The acquisition is expected to generate mid-single-digit net investment income accretion during the first full quarter following the transaction close, while more than offsetting anticipated loan repayments previously signaled by the company.

The transaction will substantially increase Runway Growth's exposure to the healthcare sector, with healthcare investments rising to approximately 31% of the portfolio from 14% as of June 30, 2025. This expansion into healthcare and life sciences represents a strategic move into large and growing markets where both companies have established expertise. The acquisition will also bring additional healthcare and life sciences team members from SWK to enhance Runway Growth Capital's investment and deal sourcing capabilities.

Financially, the transaction will expand Runway Growth's balance sheet to $1.3 billion in total assets pro forma for the SWK acquisition. The company expects improvements in dividend coverage and return on equity, along with an expansion of its pro-forma leverage ratio. These enhancements to Runway Growth's financial profile will increase the company's nominal leverage capacity and support continued risk-adjusted returns for shareholders.

The acquisition includes SWK's portfolio of 22 companies with an approximate fair value of $242 million based on Runway Growth's estimates conducted as of August 15, 2025. The transaction structure includes a fixed stock component expected to total $75.5 million in Runway Growth shares valued at closing NAV per share and approximately $145 million in cash. Runway Growth Capital LLC will contribute an additional $9 million in cash for distribution as consideration to SWK stockholders.

This transaction positions Runway Growth to execute on both organic and inorganic growth strategies, supported by the BC Partners Credit platform. The acquisition provides a repeatable blueprint for future deals in the venture and growth investment ecosystem that is non-dilutive to shareholders. The company is broadening its shareholder base and trading liquidity through the merger terms, which include the issuance of Runway Growth shares to SWK's shareholders.

SWK's Board of Directors has unanimously approved the transaction, and Carlson Capital L.P. has signed a Voting Agreement supporting the deal. The transaction is expected to close in late 2025 or the first quarter of 2026, pending SWK shareholder and regulatory approvals and other customary closing conditions. Additional information about the companies can be found at https://www.runwaygrowth.com and https://www.swkhold.com.

The acquisition represents a significant consolidation in the specialty finance sector, particularly in healthcare and life sciences financing. For investors and the broader financial community, this transaction demonstrates the continued maturation of the venture debt market and the strategic importance of healthcare investments in growth-oriented portfolios. The combined entity's enhanced scale and diversification could potentially influence investment trends in the specialty finance industry, particularly for companies seeking alternatives to traditional equity financing.