Ares Capital to Buy MidCap Financial in $2.6 Billion Deal

The Tip Desk · November 8, 2026 · 3 min read

The largest publicly traded BDC will pay $10.88 a share, a 30.1% premium, to fold MidCap Financial into a combined book of more than 800 companies.

Ares Capital Corporation (ARCC) agreed to acquire MidCap Financial Investment Corporation (MFIC) in a stock-and-cash transaction with a total enterprise value of approximately $2.6 billion, a combination the two boards said would keep Ares Capital the largest publicly traded business development company.

MFIC stockholders are expected to receive $10.88 per fully diluted share, consisting of about $1.21 in cash from an Ares Management subsidiary and about $9.67 in Ares Capital common stock, adjusted for a special dividend MFIC is to pay. The purchase price represented a 30.1% premium to MFIC’s last closing price and a 25.8% premium to its 30-day volume-weighted average price.

Both boards approved the deal unanimously, with MFIC’s board acting on the recommendation of a special committee of independent directors. Ares Capital may issue up to about 41 million shares, though the company said the total is expected to be lower after the exchange-ratio adjustment for that special dividend. After closing, existing Ares Capital stockholders are expected to own about 95% of the combined company and MFIC holders about 5%, excluding the special-dividend effect.

Chief Executive Officer Kort Schnabel said the deal “brings a diversified portfolio and valuable borrower and sponsor relationships” that, combined with Ares Capital’s private-credit capabilities, “will bolster the long-term growth profile of Ares Capital.” Chief Financial Officer Scott Lem said the company expects the transaction to be “accretive to core earnings and supportive of our future dividends.” MFIC Executive Chairman and Chief Executive Officer Tanner Powell called it a “value-maximizing transaction” that sits “meaningfully above MFIC’s current stock price.”

At closing, the companies said the transaction is expected to lift Ares Capital’s pro forma portfolio to more than 800 portfolio companies and over $31 billion of investments at fair value as of September 30, 2026. MFIC’s book is expected to add more than 200 incumbent positions and expand the number of sponsors Ares Capital has transacted with to more than 600. The combined firm is expected to benefit from MFIC’s senior secured investments and their current yields.

The deal follows Ares Capital’s prior acquisitions of Allied Capital Corporation and American Capital, Ltd., which the company said have contributed to its long-term growth. Apollo Principal Holdings A, L.P. and MidCap Financial Trust, Apollo affiliates that together beneficially own 5.2% of MFIC, entered voting and support agreements with Ares Capital. Wells Fargo agreed, subject to customary conditions, to provide $750 million of additional secured financing.

MFIC, externally managed by an Apollo affiliate, primarily invests in first-lien senior secured loans to U.S. middle-market companies. Apollo Asset Management co-president John Zito said the firm “will continue to invest in and grow our middle-market direct lending franchise, including through the MidCap Financial platform.”

The transaction is expected to close in the first half of 2027, subject to MFIC stockholder approval, regulatory approvals and other customary conditions. Ares Capital will remain externally managed by Ares Capital Management LLC, with its existing board and management team expected to stay in place.