Key Takeaways
- • Ares Capital will acquire MidCap Financial Investment from Apollo Global Management in a deal valued at USD2.6 billion ($3.7 billion), according to Capital Brief.
- • MidCap shareholders will receive USD1.21 per share in cash plus about USD9.67 in Ares Capital stock under the merger agreement.
- • The consideration represents a 30% premium to MidCap's share price but a 15% discount to its net asset value as of September 30.
- • MidCap will pay shareholders all undistributed income through a special dividend before closing, with that amount deducted from the final equity payment.
- • The transaction comes as private credit managers, including Apollo, have sold underperforming funds amid sector turmoil and rising default concerns, per Bloomberg.
Summary
Ares Capital will acquire private credit fund MidCap Financial Investment from Apollo Global Management in a transaction valued at USD2.6 billion ($3.7 billion), Capital Brief reported on October 27, 2026. Under the merger agreement, MidCap shareholders will receive USD1.21 per share in cash and approximately USD9.67 in Ares Capital stock.
The headline price represents a 30% premium to MidCap's prevailing share price, but a 15% discount to the fund's net asset value as of September 30. Before the transaction closes, MidCap plans to distribute all undistributed income to shareholders through a special dividend, the value of which will be deducted from the final equity payment.
According to the company's statement, the merger would strengthen Ares Capital's position as a leading lender to mid-sized U.S. companies. MidCap provides loans through its private credit portfolio to U.S. businesses with less than USD75 million in annual earnings.
The deal follows a broader pattern of private credit managers divesting weaker vehicles this year amid turmoil in the sector, Bloomberg reported. Apollo had put MidCap Financial Investment up for sale earlier in 2026 after a selloff in its shares, as investors grew concerned about rising defaults. The WSJ reported that MidCap's shares traded near a 40% discount to net asset value before the Ares agreement was announced, reflecting its mediocre performance.
The headline price represents a 30% premium to MidCap's prevailing share price, but a 15% discount to the fund's net asset value as of September 30. Before the transaction closes, MidCap plans to distribute all undistributed income to shareholders through a special dividend, the value of which will be deducted from the final equity payment.
According to the company's statement, the merger would strengthen Ares Capital's position as a leading lender to mid-sized U.S. companies. MidCap provides loans through its private credit portfolio to U.S. businesses with less than USD75 million in annual earnings.
The deal follows a broader pattern of private credit managers divesting weaker vehicles this year amid turmoil in the sector, Bloomberg reported. Apollo had put MidCap Financial Investment up for sale earlier in 2026 after a selloff in its shares, as investors grew concerned about rising defaults. The WSJ reported that MidCap's shares traded near a 40% discount to net asset value before the Ares agreement was announced, reflecting its mediocre performance.
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