MidCap Financial Investment Corporation (NASDAQ: MFIC) has entered into a definitive merger agreement under which Ares Capital Corporation (NASDAQ: ARCC) will acquire MFIC. The transaction is valued at approximately $2.6 billion in enterprise value.
Under the terms of the agreement, which was approved by the boards of directors of both companies, MFIC stockholders will receive total consideration of $10.88 per fully diluted share. This consideration consists of approximately $1.21 per share in cash provided by a subsidiary of Ares Management and approximately $9.67 per share in Ares Capital common stock.
The exchange ratio for the stock consideration is determined based on Ares Capital’s net asset value per share and its share price, subject to specific formulas. If Ares Capital’s share price exceeds its net asset value, MFIC stockholders will receive additional shares, capped at a maximum of 102.25% of net asset value.
Before the transaction closes, MFIC plans to declare a special dividend to distribute its undistributed taxable income. This dividend will reduce the cash portion of the consideration paid by Ares Management.
The transaction is expected to close in the first half of 2027, subject to the approval of MFIC’s stockholders and other customary closing conditions. Following the merger, Ares Capital will continue to be externally managed by Ares Capital Management LLC.
Ares Capital estimates that the transaction will be accretive to its core earnings per share and expects to increase its pro forma portfolio to more than 800 companies and over $31 billion in investments at fair value as of September 30, 2026.
