JMP Group Sells Interest in Harvest Capital to Portman Ridge for $9.7M

The investment banking and asset management firm JMP Group (JMP) has divested its interest in Harvest Capital Credit Corporation to Portman Ridge Finance Corporation. Following the announcement, shares of the company rose 1.1% to close at $5.7 on June 11.

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The transaction is valued at approximately $9.7 million, which consists of cash and stock.

Chairman and CEO Joe Jolson said, “This transaction represents the continuation of our well-established plan to divest non-strategic asset management businesses in order to simplify our company and deleverage.”

Jolson further added, “While we had not been receiving a regular cash dividend from HCAP in recent quarters, we now have the opportunity to redeploy the capital returned to us in a fashion that could be immediately accretive to earnings per share.” (See JMP Group stock analysis on TipRanks)

On April 29, JMP Group delivered better-than-expected quarterly results. Revenues of $38.5 million surpassed the Street’s estimates of $23.8 million and jumped 630.8% from the year-ago period. Earnings came in at $0.05 per share and outpaced consensus estimates of $0.02 per share.

The stock has picked up a rating from one analyst in the past three months. Barrington analyst Alexander Paris maintained a Buy rating and a price target of $7.50 (31.1% upside potential). Shares have increased 62.9% over the past six months.

Paris said, “To reflect the results of the first quarter, we have made the following changes to our model. We now expect total net revenue of $136.7 million (+18.3% YOY) in 2021, above our prior estimate of $132.7 million; operating net income of $11.8 million, above our prior estimate of $8.8 million; and operating earnings per share of $0.57, above our prior estimate calling for operating net income per share of $0.44.”