Highlights

  • MFIC stockholders are expected to receive total consideration of $10.88 per fully diluted share, including about $1.21 in cash.
  • MFIC's preliminary net asset value per share estimate as of September 30, 2026 is approximately $12.86, and it is unaudited.
  • The transaction has a total enterprise value of approximately $2.6 billion and is expected to close in the first half of 2027.
  • MFIC would pay Ares Capital a termination fee of $31,360,000 under certain specified circumstances and has agreed to suspend its repurchase program.

MidCap Financial Investment Corporation (NASDAQ: MFIC) shares were trading at USD 10.35 on October 27, 2026, up 23.80%, with a relative volume at time of 17.76. The externally managed business development company signed a merger agreement with Ares Capital Corporation on October 26, 2026, and on October 27, 2026 it released a preliminary net asset value per share estimate as of September 30, 2026.

MidCap Financial Investment Corporation is a Maryland corporation with principal executive offices at 9 West 57th Street in New York. It is a closed-end, externally managed, diversified management investment company that has elected to be treated as a business development company under the Investment Company Act of 1940. For tax purposes it has elected to be treated as a regulated investment company. Apollo Investment Management, L.P. manages it. The company primarily invests in first lien senior secured loans to privately held U.S. middle-market companies.

Merger Terms With Ares Capital

Ares Capital Corporation will acquire MFIC in a stock-and-cash transaction with a stated total enterprise value of approximately $2.6 billion. The boards of both companies approved the agreement unanimously, and MFIC's board acted on the unanimous recommendation of a special committee of independent directors.

MFIC stockholders are expected to receive total consideration of $10.88 per fully diluted share. That consists of approximately $1.21 per share in cash, paid by a subsidiary of Ares Management, and approximately $9.67 per share in Ares Capital common stock, as adjusted for the cash received from MFIC's special dividend. The stated consideration represents a premium of approximately 30.1% to MFIC's closing share price on October 26, 2026 and approximately 25.8% to its 30-day volume-weighted average share price for the period ending October 26, 2026.

Ares Capital may issue up to approximately 41 million shares, though the total is expected to be lower after the exchange ratio adjustment for the special dividend. Without the effect of that dividend, existing Ares Capital stockholders are expected to own approximately 95% of the combined company and existing MFIC stockholders approximately 5%.

Before closing, MFIC expects to declare and pay a special dividend of all undistributed taxable income estimated to remain at closing. The stock portion of the consideration will be reduced dollar for dollar for that dividend. Holders of MFIC common stock will not have appraisal or objecting stockholder rights.

Net Asset Value Estimate

MFIC's preliminary estimate of net asset value per share as of September 30, 2026 is approximately $12.86. MFIC management prepared the estimate, and MFIC's board has not approved it. Deloitte & Touche LLP, MFIC's independent registered public accounting firm, has not audited, reviewed, compiled or performed any procedures on it. MFIC said the figures in its Form 10-Q for the quarter ended September 30, 2026 may differ, and that any differences may be material. MFIC expects to release its third quarter 2026 results on Thursday, November 5, 2026.

Conditions, Fees and Financing

The transaction is expected to close in the first half of 2027, subject to approval of MFIC stockholders, applicable regulatory approvals and other customary conditions. Either party may terminate if the first merger is not completed within nine months of the agreement date, subject to an automatic three month extension in certain circumstances, or if MFIC stockholders do not approve it. MFIC must pay Ares Capital a termination fee of $31,360,000 under certain specified circumstances, and the agreement limits its ability to solicit alternative proposals.

Apollo Principal Holdings A, L.P. and MidCap Financial Trust, which together beneficially own approximately 5.2% of MFIC common stock, signed voting and support agreements with Ares Capital. Wells Fargo has agreed, subject to customary conditions, to provide $750 million of additional secured financing that can be used to support the transaction. The companies listed risks including failure to close on the expected timeline or at all, stockholder litigation and unexpected costs.