The Zhitong Finance App learned that Ares Capital Corp. (ARCC.US) announced that it has agreed to acquire the private credit fund MidCap Financial Investment Corp. (MFIC.US) from Apollo Global Management Inc., using the cash plus stock method for the transaction, with a corporate value of 2.6 billion US dollars.
The companies said in a statement on Tuesday that under the terms of the deal, MFIC shareholders will receive $10.88 per share, which includes approximately $1.21 in cash and $9.67 in Ares Capital common stock. The price is about 30% higher than MFIC's closing price on Monday.
Since this year, private credit managers have been seeking to sell underperforming funds against the backdrop of wider market turmoil and investor redemptions, while attracting competitors to sell at low prices in this $1.8 trillion market. According to previous reports, publicly listed funds, including TCP Capital Corp., WhiteHorse Finance Inc. and Investcorp Credit Management BDC Inc. under BlackRock Inc. have indicated that they are weighing strategic options, which may include sales.
MFIC is a publicly listed business development company (BDC). As of press time, its stock price has risen by more than 20%, while Ares Capital has risen slightly.
For Apollo, selling MFIC was a strategic retreat from “historical assets.” MidCap Financial was originally a direct loan platform acquired by Apollo in 2013. MFIC acted as its public listing carrier, formerly known as Apollo Investment Corporation. However, this carrier has continued to lose blood in recent years: the default rate jumped from 3.9% at the end of 2025 to 5.3% in the first quarter of 2026. The net loss for the quarter was 61 million US dollars, and the stock price was traded at a sharp discount on net asset value (NAV) for a long time.
For Ares Capital, the appeal of this deal is “buying cheap assets with strong currencies.” Ares Capital is the world's largest publicly traded BDC. Its parent company, Ares Management, manages assets of approximately US$484 billion. The credit platform itself is one of the largest spontaneously originating lenders in the US midmarket direct loan sector. Using its own stock as the main payment consideration means that Ares uses the market's valuation of its platform to replace an asset pool traded at a discount.