Ares Capital has agreed to acquire Apollo Global Management’s MidCap Financial Investment Corporation in a $2.6bn cash-and-stock transaction, extending consolidation across the publicly traded private credit sector, according to a report by Reuters.
The transaction values MidCap at $10.88 per fully diluted share, comprising approximately $1.21 in cash and $9.67 in Ares Capital stock, representing a premium of more than 30% to its previous closing price.
The acquisition will reportedly expand Ares Capital’s direct lending portfolio to more than 800 companies, strengthening its exposure to middle-market borrowers across a wider range of industries and financial sponsors. It follows growing pressure on business development companies (BDCs), several of which are trading at substantial discounts to net asset value amid concerns over loan quality.
The deal, expected to close in the first half of 2027, is reportedly anticipated to increase Ares Capital’s core earnings per share. Wells Fargo is advising Ares Capital and providing $750m in financing, while Moelis is advising MidCap’s special committee.
