GOLUB CAPITAL BDC Inc

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You should carefully consider these risk factors, together with all of the other information included in this Quarterly Report on Form 10-Q and the other reports and documents filed by us with the SEC. The risks set out below are not the only risks we face. Additional risks and uncertainties not presently known to us or not presently deemed material by us may also impair our operations and performance. If any of the following events occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In such case, our NAV and the trading price of our common stock could decline, and you may lose all or part of your investment. The risk factors described below and in our Annual Report on Form 10-K for the year ended September 30, 2023 are the principal risk factors associated with an investment in us as well as those factors generally associated with an investment company with investment objectives, investment policies, capital structure or trading markets similar to ours.

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Risks Relating to the Proposed Merger

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Sales of shares of our common stock after the completion of the Proposed Merger may cause the market price of our common stock to decline.

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At the effective time of the Proposed Merger, each share of GBDC 3 common stock issued and outstanding immediately prior to such time (other than shares owned by us or any of our consolidated subsidiaries, which are referred to as the Cancelled Shares), will be converted into the right to receive a number of shares of our common stock equal to the Exchange Ratio, plus any cash (without interest) in lieu of fractional shares. For illustrative purposes, based on (a) September 30, 2023 net asset values and excluding transaction costs and other tax-related distributions but adjusted, in the case of GBDC 3 for the $0.30 per share special distribution declared on November 17, 2023 and paid on December 8, 2023, and (b) an assumed trading price for our common stock that is below our net asset value, we would issue approximately 93.1 million shares of our common stock in the aggregate pursuant to the GBDC 3 Merger Agreement based on the GBDC 3 shares of common stock outstanding as of November 30, 2023, resulting in pro forma ownership of 64.5% for our current stockholders and 35.5% for current GBDC 3 stockholders. Former GBDC 3 stockholders may decide not to hold the shares of our common stock that they will receive pursuant to the GBDC 3 Merger Agreement. Certain of GBDC 3’s stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of our common stock that they receive pursuant to the GBDC 3 Merger Agreement. In addition, our stockholders may decide not to hold their shares of our common stock after completion of the Proposed Merger. In each case, such sales of our common stock could have the effect of depressing the market price for our common stock and may take place promptly following the completion of the Proposed Merger.

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GBDC 3’s stockholders and our stockholders will experience a reduction in percentage ownership and voting power in the combined company as a result of the Proposed Merger.

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Our stockholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power in respect of the combined company relative to their respective ownership interests in us prior to the Proposed Merger. Consequently, our stockholders should expect to exercise less influence over the management and policies of the combined company following the Proposed Merger than they currently exercise over the management and policies of us. GBDC 3’s stockholders will experience a substantial reduction in their respective percentage ownership interests and effective voting power in respect of the combined company relative to their respective percentage ownership interests in GBDC 3 prior to the Proposed Merger. Consequently, GBDC 3’s stockholders should expect to exercise less influence over the management and policies of the combined company following the Proposed Merger than they currently exercise over the management and policies of GBDC 3.

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For illustrative purposes, based on (a) September 30, 2023 net asset values and excluding transaction costs and other tax-related distributions but adjusted, in the case of GBDC 3 for the $0.30 per share special distribution declared on November 17, 2023 and paid on December 8, 2023, and (b) an assumed trading price for our common stock that is below our net asset value, we would issue approximately 93.1 million shares of our common stock in the aggregate pursuant to the GBDC 3 Merger Agreement based on the GBDC 3 shares of common stock outstanding as of November 30, 2023, resulting in pro forma ownership of 64.5% for our current stockholders and 35.5% for current GBDC 3 stockholders. Prior to completion of the Proposed Merger, subject to certain restrictions in the GBDC 3 Merger Agreement, we and GBDC 3 may each issue additional shares of common stock, which would further reduce the percentage ownership of the combined company held by our current stockholders or to be held by GBDC 3’s stockholders, as applicable. After completion of the Proposed Merger, we may issue additional shares of our common stock, including, subject to certain restrictions under the 1940 Act, including stockholder approval of such issuance, at prices below the then-current NAV per share of our common stock. The issuance or sale by us of shares of our common stock at a discount to NAV poses a risk of dilution to our stockholders and former GBDC 3 stockholders.

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We may be unable to realize the benefits anticipated by the Proposed Merger, including estimated cost savings, or it may take longer than anticipated to achieve such benefits.

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The realization of certain benefits anticipated as a result of the Proposed Merger will depend in part on the integration of GBDC 3’s investment portfolio with ours and the integration of GBDC 3’s business with our business. There can be no assurance that GBDC 3’s investment portfolio or business can be operated profitably or integrated successfully into our operations in a timely fashion or at all. The dedication of management resources to such integration may detract attention from the day-to-day business of the combined company, and there can be no assurance that there will not be substantial costs associated with the transition process or that there will not be other material adverse effects as a result of these integration efforts. Such effects, including incurring unexpected costs or delays in connection with such integration and failure of GBDC 3’s investment portfolio to perform as expected, could have a material adverse effect on the financial results of the combined company.

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We also expect to achieve certain cost savings from the Proposed Merger when the two companies have fully integrated their portfolios. It is possible that the estimates of the potential cost savings could ultimately be incorrect. The cost savings estimates also assume we will be able to combine the operations of us and GBDC 3 in a manner that permits those cost savings to be fully realized. If the estimates turn out to be incorrect or if we are not able to combine GBDC 3’s investment portfolio or business with our operations successfully, the anticipated cost savings may not be fully realized or realized at all or may take longer to realize than expected.

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The Proposed Merger may trigger certain “change of control” provisions and other restrictions in contracts of ours, GBDC 3 or their affiliates and the failure to obtain any required consents or waivers could adversely impact the combined company.

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Certain agreements of ours and GBDC 3 or their affiliates, which may include agreements governing indebtedness of us or GBDC 3, will or may require the consent or waiver of one or more counterparties in connection with the Proposed Merger. The failure to obtain any such consent or waiver may permit such counterparties to terminate, or otherwise increase their rights or our or GBDC 3’s obligations under, any such agreement because the Proposed Merger or other transactions contemplated by the GBDC 3 Merger Agreement may violate an anti-assignment, change of control or other similar provision relating to any of such transactions. If this occurs, we may have to seek to replace that agreement with a new agreement or seek an amendment to such agreement. We cannot assure you that we will be able to replace or amend any such agreement on comparable terms or at all. If these types of provisions are triggered in agreements governing indebtedness of us or GBDC 3, the lender or holder of the debt instrument could accelerate repayment under such indebtedness and negatively affect our business, financial condition, results of operations and cash flows. See “Risks Relating to Our Business and Structure – We finance our investments with borrowed money, which will accelerate and increase the potential for gain or loss on amounts invested and could increase the risk of investing in us” in our Annual Report on Form 10-K for the year ended September 30, 2023.

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If any such agreement is material, the failure to obtain consents, amendments or waivers under, or to replace on similar terms or at all, any of these agreements could adversely affect the financial performance or results of operations of the combined company following the Proposed Merger, including preventing us from operating a material part of GBDC 3’s business.

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In addition, the consummation of the Proposed Merger may violate, conflict with, result in a breach of provisions of, or the loss of any benefit under, constitute a default (or an event that, with or without notice or lapse of time or both, would constitute a default) under, or result in the termination, cancellation, acceleration or other change of any right or obligation (including any payment obligation) under, certain agreements of us or GBDC 3. Any such violation, conflict, breach, loss, default or other effect could, either individually or in the aggregate, have a material adverse effect on the financial condition, results of operations, assets or business of the combined company following completion of the Proposed Merger.

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If the Proposed Merger does not close, we will not benefit from the expenses incurred in its pursuit.

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The Proposed Merger may not be completed. If the Proposed Merger is not completed, we will have incurred substantial expenses for which no ultimate benefit will have been received. We have incurred out-of-pocket expenses in connection with the Proposed Merger for investment banking, legal and accounting fees and financial printing and other related charges, much of which will be incurred even if the Proposed Merger is not completed.

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The termination of the GBDC 3 Merger Agreement could negatively impact us.

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If the GBDC 3 Merger Agreement is terminated, there may be various consequences, including:

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•our businesses may have been adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the Proposed Merger, without realizing any of the anticipated benefits of completing the Proposed Merger;

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•the market price of our common stock might decline to the extent that the market price prior to termination reflects a market assumption that the Proposed Merger will be completed; and

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The GBDC 3 Merger Agreement limits the ability of the Company to pursue alternatives to the Proposed Merger.

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The GBDC 3 Merger Agreement contains provisions that limit our ability to discuss, facilitate or commit to competing third-party proposals to acquire all or a significant part of us. These provisions, which are typical for transactions of this type, and include a $76.0 million termination fee payable by a third-party acquiror of us under certain circumstances, might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of us from considering or proposing that acquisition or might result in a potential competing acquiror proposing to pay a lower per share price to acquire us than it might otherwise have proposed to pay.

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The Proposed Merger is subject to closing conditions, including stockholder approvals, that, if not satisfied or waived, will result in the Proposed Merger not being completed, which may result in material adverse consequences to our business and operations.

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The Proposed Merger is subject to closing conditions, including certain approvals of GBDC 3’s and our respective stockholders that, if not satisfied, will prevent the Proposed Merger from being completed. The closing condition that GBDC 3’s stockholders approve the Proposed Merger may not be waived under applicable law and must be satisfied for the Proposed Merger to be completed. GBDC 3 currently expects that all directors and executive officers of GBDC 3 will vote their shares of GBDC 3 common stock in favor of the proposals presented at the GBDC 3 special meeting of stockholders. If GBDC 3’s stockholders do not approve the Proposed Merger and the Proposed Merger is not completed, the resulting failure of the Proposed Merger could have a material adverse impact on GBDC 3’s business and operations. The closing condition that our stockholders approve the issuance of the shares of the Company’s common stock pursuant to the GBDC 3 Merger Agreement, which proposal is referred to as the Merger Stock Issuance Proposal, may not be waived under applicable law and must be satisfied for the Proposed Merger to be completed. The Company currently expects that all directors and executive officers of the Company will vote their shares of the Company’s common stock in favor of the proposal to be presented at the Company’s special meeting of stockholders. If the Company’s stockholders do not approve the Merger Stock Issuance Proposal and the Proposed Merger is not completed, the resulting failure of the Proposed Merger could have a material adverse impact on our business and operations. In addition to the required approvals of GBDC 3’s and our stockholders, the Proposed Merger is subject to a number of other conditions beyond GBDC 3’s and our control that may prevent, delay or otherwise materially adversely affect its completion. Neither GBDC 3 nor we can predict whether and when these other conditions will be satisfied.

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We and GBDC 3 are subject to operational uncertainties and contractual restrictions while the Proposed Merger is pending.

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Uncertainty about the effect of the Proposed Merger may have an adverse effect on us and GBDC 3 and, consequently, on the combined company following completion of the Proposed Merger. These uncertainties may cause those that deal with us and GBDC 3 to seek to change their existing business relationships with us and GBDC 3, respectively. In addition, the GBDC 3 Merger Agreement restricts us and GBDC 3 from taking actions that they might otherwise consider to be in their best interests. These restrictions may prevent us and GBDC 3 from pursuing certain business opportunities that may arise prior to the completion of the Proposed Merger.

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We and GBDC 3 may waive one or more conditions to the Proposed Merger without resoliciting stockholder approval.

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Certain conditions to our and GBDC 3’s obligations to complete the Proposed Merger may be waived, in whole or in part, to the extent legally allowed, either unilaterally or by agreement of us and GBDC 3. In the event that any such waiver does not require re-solicitation of stockholders, the parties to the GBDC 3 Merger Agreement will have the discretion to complete the Proposed Merger without seeking further stockholder approval. The conditions requiring the approval of each of the Merger Stock Issuance Proposal by our stockholders and the Proposed Merger by GBDC 3’s stockholders, however, cannot be waived.

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The market price of our common stock after the Proposed Merger may be affected by factors different from those affecting our common stock currently.

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The businesses of us and GBDC 3 differ in some respects and, accordingly, the results of operations of the combined company and the market price of our common stock after the Proposed Merger may be affected by factors different from those currently affecting the independent results of operations of each of us and GBDC 3. These factors include a larger stockholder base and a different capital structure.

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Accordingly, the historical trading prices and financial results of us may not be indicative of these matters for the combined company following the Proposed Merger.