Transaction expands Runway’s healthcare and life sciences footprint and strengthens its specialty finance platform
Runway Growth Finance Corp. (Nasdaq: RWAY) announced it has entered into a definitive merger agreement to acquire SWK Holdings Corporation (Nasdaq: SWKH) in a net asset value (“NAV”)-for-NAV transaction valued at approximately $220 million, based on SWK’s June 30, 2025 financials and estimated transaction expenses. The deal combines two specialty finance firms with complementary portfolios and shared focus on non-dilutive, growth-oriented capital solutions.
Under the terms of the agreement, consideration to SWK stockholders will include $75.5 million in Runway Growth shares valued at closing NAV per share and approximately $145 million in cash, subject to final NAV adjustments prior to closing. In addition, Runway Growth Capital LLC, Runway’s external investment adviser and an affiliate of BC Partners Advisors L.P., will contribute $9 million in cash to SWK stockholders, separate from the primary merger consideration.
Strategic Expansion in Healthcare and Life Sciences
The merger significantly enhances Runway’s exposure to the healthcare and life sciences sectors. Upon completion, healthcare investments will comprise approximately 31% of Runway’s portfolio, up from 14% as of June 30, 2025. The combined company will have an estimated $1.3 billion in total assets, providing greater scale, diversification, and a broader investment platform for future growth.
SWK Holdings specializes in providing minimally dilutive financing to small- and mid-sized, commercial-stage healthcare companies through structured debt, royalty monetization, and asset-based transactions. Integrating SWK’s portfolio and experienced life sciences team will expand Runway’s deal sourcing and underwriting capabilities in one of the fastest-growing areas of specialty finance.
Enhanced Financial Profile and Growth Opportunities
Runway expects the transaction to be accretive to net investment income (NII) by the first full quarter post-closing, generating mid-single-digit run-rate NII accretion, while improving dividend coverage and return on equity (ROE). The company also anticipates a pro forma leverage ratio increase, expanding its nominal borrowing capacity and supporting continued risk-adjusted returns.
“This transaction meaningfully advances our strategy to diversify and optimize our portfolio by adding SWK’s high-quality investments in healthcare and life sciences,” said David Spreng, Founder and CEO of Runway Growth Finance. “We’re enhancing our earnings power while reinforcing portfolio strength and positioning for long-term value creation. With the support of BC Partners, we continue to pursue both organic and inorganic growth opportunities as a permanent capital vehicle backed by the $10 billion BC Partners Credit platform.”
A Repeatable Blueprint for Growth
Runway described the merger as a non-dilutive, repeatable model for future transactions within the venture and growth lending ecosystem. The company expects to benefit from both expanded scale and greater market visibility through the issuance of Runway Growth shares to SWK stockholders, broadening its shareholder base and trading liquidity.
Company Overviews
Runway Growth Finance Corp. is a specialty finance company providing flexible debt and structured financing to late- and growth-stage companies seeking an alternative to equity dilution. The company operates as a closed-end investment fund regulated as a business development company (BDC) under the Investment Company Act of 1940 and is externally managed by Runway Growth Capital LLC.
SWK Holdings Corporation is a life sciences-focused specialty finance company that partners with small- and mid-sized healthcare firms to fund the development and commercialization of medical technologies. Its customized financing solutions typically range from $5 million to $25 million and are designed to support long-term value creation while minimizing equity dilution.
