Ares Capital Corp. to Acquire MidCap Financial Investment Corp. for $2.60 Billion

Ares Capital Corporation (ARCC) entered into a merger agreement on October 27, 2026, to acquire MidCap Financial Investment Corporation (MFIC) for $2.60 billion.

Deal Structure:

MFIC stockholders are expected to receive total consideration of $10.88 per fully diluted share of MFIC common stock, consisting of about $1.21 per share in cash, provided by a subsidiary of Ares Management (ARES), and roughly $9.67 per share in Ares Capital common stock, as adjusted for the cash received from MFIC’s special dividend.

The consideration of $10.88 represents a premium of 30.14% over the stock’s last close.

Before the deal is finalized, MFIC plans to pay its shareholders a special dividend using all the undistributed taxable income. The value of Ares Capital shares that MFIC shareholders will receive will be reduced by the amount of this dividend.

The number of Ares Capital shares each MFIC shareholder receives will be calculated using a share value equal to whichever is higher: Ares Capital’s net asset value (NAV) per share or its market share price. Additionally, MFIC shareholders will receive 50% of any amount by which Ares Capital’s market share price exceeds its NAV, up to a market price of 104.5% of NAV.

Company Profile:

MidCap Financial Investment Corporation is an externally managed, publicly traded business development company (BDC) that provides debt and equity financing to privately held U.S. middle-market companies. It primarily invests in first-lien senior secured loans and, to a lesser extent, other debt instruments and equity securities to generate current income and long-term capital appreciation.

Ares Capital Corporation is an externally managed business development company (BDC) that provides debt and equity financing to U.S. middle-market companies to support acquisitions, recapitalizations, business growth, and refinancing. It primarily invests in senior secured loans, along with subordinated debt and equity securities, across a range of industries.

Deal Details and Timeline:

In May, WSJ reported that Apollo Global Management (APO) had been holding talks to sell MidCap Financial Investment, its publicly listed BDC. The stock was trading at $11.71 when the talks were ongoing.

Apollo Principal Holdings A and MidCap Financial Trust, both affiliates of Apollo Management and together beneficial owners of 5.2% of MFIC’s outstanding common stock, have entered into voting and support agreements with Ares Capital.

Ares Capital may issue up to approximately 41 million shares of its common stock to MFIC shareholders. Existing Ares Capital shareholders are expected to own about 95% of the combined company, while existing MFIC shareholders are expected to own roughly 5%.

Wells Fargo has also agreed to provide $750 million in additional secured financing to support the transaction.

The merger is expected to close in the first half of 2027.

MFIC received financial advice from Moelis & Co. and legal assistance from Simpson Thacher & Bartlett, Willkie Farr & Gallagher, and Stradley Ronon Stevens & Young. Ares Capital received financial advice from Wells Fargo and legal assistance from Kirkland & Ellis, Latham & Watkins, and Eversheds Sutherland.

Ares Capital is purchasing MFIC at a multiple of 6.40 times its earnings.

Deal Metrics:

For a more comprehensive analysis of this merger and acquisition, visit the Deal Metrics page here:
Deal Metrics for the acquisition of MidCap Financial Investment Corporation (MFIC) by Ares Capital Corporation (ARCC).

The Deal Metrics page provides:

– A spread history chart from the announcement through completion or failure.
– A timeline of events including HSR expiration, regulatory approvals, and shareholder votes.
– News updates and SEC filings.
– A record of deal updates.
– And much more.

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Editor’s Note: Baranjot Kaur contributed to this article