Ares Capital to acquire MidCap Financial from Apollo in cash-and-stock deal

✦ Meridian Analysis

Ares Capital has signed a $2.6 billion cash‑and‑stock agreement to acquire Apollo Global Management’s MidCap Financial Investment Corporation, a publicly traded business development company. The transaction values MidCap at $10.88 per fully diluted share, comprising roughly $1.21 billion in cash and $9.67 billion in Ares Capital stock, a premium of more than 30 % to the BDC’s last closing price. Ares will use the deal to expand its direct‑lending portfolio to over 800 companies, deepening exposure to middle‑market borrowers across a broader range of industries and financial sponsors. Wells Fargo is advising Ares and providing $750 million of financing, while Moelis is advising MidCap’s special committee. The deal is expected to close in the first half of 2027 and will require shareholder approval and regulatory review. The transaction reflects the ongoing consolidation within the publicly traded private‑credit sector, where many business development companies are trading at discounts to net asset value amid concerns over loan quality. Watch for the timing of shareholder and regulatory approvals, which will determine the exact closing date. The announcement does not disclose the full structure of the financing package beyond the $750 million from Wells Fargo, nor the specific terms of the stock issuance. Details on any additional debt or equity tranches, as well as the precise valuation multiples, remain undisclosed and will be key points for market participants as the transaction moves forward.

The Meridian Weekly