Ares Capital Corporation and MidCap Financial Investment Corporation (MFIC) have entered into a definitive merger agreement under which Ares Capital will acquire MFIC in a stock and cash transaction with a total enterprise value of approximately $2.6 billion. Both boards approved the deal unanimously, with MFIC acting on the unanimous recommendation of a special committee of its independent directors. MFIC is externally managed by Apollo Investment Management, an Apollo Global Management affiliate.
MFIC stockholders are expected to receive total consideration of $10.88 per fully diluted share, consisting of about $1.21 per share in cash provided by a subsidiary of Ares Management and about $9.67 per share in Ares Capital common stock. Before closing, MFIC expects to declare and pay a special dividend distributing all of its undistributed taxable income estimated to remain at closing, which the companies expect to be meaningful; the stock consideration will be reduced dollar for dollar for that dividend. The $10.88 figure is a premium of about 30.1 percent to MFIC’s closing price on October 26, 2026 and about 25.8 percent to its 30 day volume weighted average price, against MFIC’s preliminary estimate of net asset value per share of about $12.86 at September 30, 2026.
Ares Capital may issue up to approximately 41 million shares to MFIC stockholders, and existing Ares Capital holders are expected to own about 95 percent of the combined company, with MFIC holders at about 5 percent, before the special dividend adjustment. Apollo Principal Holdings A and MidCap Financial Trust, Apollo affiliates that together beneficially own 5.2 percent of MFIC, have signed voting and support agreements. Wells Fargo, which is Ares Capital’s exclusive financial adviser, has also agreed to provide $750 million of additional secured financing to support the transaction. Ares Capital expects the deal to be modestly accretive to core earnings per share and to lift its pro forma portfolio to more than 800 portfolio companies and over $31 billion of investments at fair value as of September 30, 2026, adding more than 200 MFIC positions and taking its sponsor relationships past 600.
The transaction is expected to close in the first half of 2027, subject to MFIC stockholder approval, regulatory approvals and other customary conditions. Ares Capital will remain externally managed by Ares Capital Management, with its existing board and management in place. The merger agreement, dated October 26, 2026, was filed with the SEC as Exhibit 2.1 to Ares Capital’s Form 8-K on October 27.