Ares Capital seals $2.6 billion deal for Apollo's MFIC as consolidation continues
ARCC•Ares Capital will acquire Apollo's MidCap Financial Investment Corp in a $2.6 billion cash-and-stock deal. MidCap shareholders will receive $10.88 per share, and the deal is expected to close in the first half of 2027.
1. Deal terms
Ares Capital said it will acquire MidCap Financial Investment Corp for $2.6 billion in cash and stock. MidCap shareholders will receive $10.88 per fully diluted share, consisting of about $1.21 in cash and $9.67 in Ares Capital stock; the offer is a premium of more than 30% to Monday's close.
2. Portfolio expansion
The acquisition will expand Ares Capital's portfolio to more than 800 companies across a broader range of industries and financial sponsors. CEO Kort Schnabel said the firm is positioned to pursue further opportunities, and the deal is expected to boost core earnings per share.
3. Industry consolidation
The deal adds to consolidation among publicly traded private credit funds, whose shares are trading at steep discounts to net asset value as investors question the quality of their loans. BlackRock TCP Capital, Investcorp Credit Management BDC and WhiteHorse Finance have said they are weighing strategic options.
