Stellus Capital Management, LLC Provides Unitranche Financing in Support of the Acquisition of Nature’s Choice by Compost360, a Platform Newly Formed by the Sterling Group Foundation Fund

HOUSTON--(BUSINESS WIRE)-- Stellus Capital Management, LLC (“Stellus”) announced today that its affiliates provided senior debt financing and an equity co-investment in support of The Sterling Group’s (“Sterling”) formation of Compost360, a new platform focused on building a leading processor of organic waste material and producer of high quality, sustainable landscaping products. Sterling is partnering with two industry executives, Steve Carn and Randy Arnold, who will serve as CEO and COO of the Compost360 platform.

The first acquisition by Compost360 is Nature’s Choice, an organic waste recycling company and producer of compost, mulch, and engineered soils based in New Jersey. “Nature's Choice is a leader in the organic recycling and mulch/soil market and serves as an ideal initial partnership for the Compost360 platform,” said Lucas Cutler, Partner of The Sterling Group Foundation Fund, adding, “We appreciate the efficiency and flexibility provided by Stellus throughout the financing process which supports our vision of building a vertically-integrated organics waste recycling and composting platform with national scale.”

“We value our long-standing relationship with Sterling and are excited to support Sterling’s Foundation Fund and the first acquisition for Compost360,” said Gavin Roseman, Managing Director at Stellus, adding, “Sterling’s hands-on approach to operations with support from industry veterans, Steve Carn and Randy Arnold, provides a strong foundation to execute the vision of the Compost360 platform.”

About Stellus Capital Management

Stellus Capital Management (“Stellus”) is one of the longest-tenured direct lenders specializing in senior secured loans in the lower middle market. Formed within the D.E. Shaw Group in 2004, Stellus spun out in 2012 and today manages $2.9 billion across various investment vehicles including closed-end institutional funds, a public BDC (NYSE: SCM), and a perpetual non-traded private BDC. Stellus is a single strategy firm and its founding partners have invested together in the lower middle market for 19+ years with a track record of $8.5bn deployed across ~350 transactions. Stellus is headquartered in Houston, TX with offices in the Washington D.C. area and Charlotte, NC. Learn more at stelluscapital.com.

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Sarah Bowes

BackBay Communications

sarah.bowes@backbaycommunications.com

Source: Stellus Capital Management, LLC