Silver Spike to acquire Chicago Atlantic loan portfolio, expand beyond marijuana

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(This story has been updated to clarify that Chicago Atlantic Real Estate Finance is not involved in this transaction.)

New York-based Silver Spike Investment Corp. will acquire Chicago Atlantic Loan Portfolio, a Chicago Atlantic spokesperson confirmed.

Silver Spike will acquire Chicago Atlantic Loan Portfolio’s loans in exchange for newly issued shares of Silver Spike common stock, the value of which will be equal to CALP’s portfolio value.

As of Jan. 1, the loan portfolio consisted of 24 loans with a value of approximately $130 million.

Chicago Atlantic agreed to add at least four loans with a combined value of about $43 million before the deal closes, but both companies might agree to add more to the portfolio.

Silver Spike said in a news release that it expects to have roughly $213 million in net assets and investments in 27 portfolio companies when the deal closes.

Illinois-headquartered Chicago Atlantic will own the majority of Silver Spike’s common stock.

Initially a marijuana-focused special purpose acquisition company (SPAC), Silver Spike has evolved into a finance entity that now calls itself a business development company.

According to another Tuesday news release, Silver Spike’s board unanimously voted to broaden the company’s investment strategy to permit investments outside of cannabis, health and wellness beginning around April 22.

“While the cannabis sector will continue to be a focus of Silver Spike’s investment efforts, Silver Spike believes that the broadened investment strategy will benefit Silver Spike and its stockholders by enabling Silver Spike to take advantage of investment opportunities outside of the cannabis and health and wellness sectors that offer attractive risk-adjusted returns,” the company said in the release.

Silver Spike trades on the NASDAQ as SSIC.