Ares Capital Corporation (ARCC) announced on October 26, 2026, that it has entered into a definitive agreement to acquire MidCap Financial Investment Corporation (MFIC) in a stock-and-cash transaction. The deal, valued at approximately $2.6 billion in enterprise value, is expected to close in the first half of 2027, subject to regulatory approvals and the approval of MFIC stockholders.
Under the terms of the agreement, MFIC stockholders will receive total consideration of $10.88 per fully diluted share. This consideration consists of approximately $1.21 in cash and approximately $9.67 in Ares Capital common stock. The cash portion is provided by a subsidiary of Ares Management, while the stock consideration is subject to an exchange ratio that adjusts based on Ares Capital’s net asset value (NAV) and share price. The exchange ratio is designed to ensure that the stock portion is based on the greater of Ares Capital’s NAV per share or its share price.
MFIC stockholders will also participate in a premium mechanism. If Ares Capital’s share price exceeds its NAV, MFIC stockholders will share in 50% of that premium, up to a maximum of 104.5% of NAV, which equates to 102.25% of NAV. The total consideration represents a premium of approximately 30.1% to MFIC’s closing share price on October 26, 2026, and a premium of approximately 25.8% to its 30-day volume-weighted average price.
MFIC is expected to declare a special dividend prior to the closing of the transaction to distribute its undistributed taxable income. This dividend will reduce the stock consideration received by MFIC stockholders on a dollar-for-dollar basis. The transaction has been unanimously approved by the boards of directors of both Ares Capital and MFIC, with the MFIC board recommending the deal following a review by its independent special committee.
Ares Capital expects the transaction to be modestly accretive to its core earnings per share and supportive of future dividends. The combined company is projected to have a portfolio of more than 800 companies and over $31 billion in investments at fair value as of September 30, 2026. Apollo Global Management, which owns approximately 5.2% of MFIC, has entered into voting and support agreements to vote its shares in favor of the merger. Wells Fargo has agreed to provide $750 million of additional secured financing to support the transaction.
