Ares Capital Corporation filed a Form 425 on October 28, 2026, containing excerpts from its October 27, 2026 earnings call disclosing its agreement to acquire MidCap Financial Investment Corporation (MFIC).

Key Highlights

  • Acquisition announced: Ares Capital Corporation disclosed an agreement to acquire MidCap Financial Investment Corporation, formerly known as Apollo Investment Corporation.
  • Portfolio scale: The combination is expected to add over 200 incumbent positions, bringing ARCC's total portfolio to over 800 companies and expanding sponsor relationships to over 600 sponsors.
  • Earnings accretion: According to the filing, the transaction is expected to be "modestly accretive to core earnings per share."
  • Funding facility: In conjunction with the announcement, ARCC obtained a $750 million upsized commitment to its existing Wells Fargo-led funding facility, expected to close upon consummation of the acquisition, subject to customary closing conditions.
  • Ares management cash contribution: Cash consideration provided by Ares management was described as "a really important component of the deal," enabling ARCC to acquire assets at a deeper discount while providing MFIC shareholders a premium.
  • Historical context: The filing states that upon closing, ARCC will have acquired all three of the largest BDCs in operation at the time of its IPO, including Allied Capital and American Capital, with both prior acquisitions generating IRRs in excess of 20% over the three years following each respective acquisition.
  • No management fee change anticipated: According to CEO Kort Schnabel, no change in the management fee rate for the acquired portfolio is anticipated.

ARCC's Agreement to Acquire MFIC: Transaction Details and Strategic Rationale

Ares Capital Corporation (NASDAQ:ARCC) filed a Form 425 disclosing excerpts from its October 27, 2026 earnings call, in which CEO Kort Schnabel and CFO Scott C. Lem discussed the company's agreement to acquire MidCap Financial Investment Corporation (MFIC). The filing was made pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934, with MFIC as the subject company (Commission File No. 814-00646).

According to the filing, accretion to core earnings per share is expected to be driven by two primary factors: the discount on acquired assets, which creates higher yields, and ARCC's cost of capital advantages relative to the MidCap platform. Schnabel characterized the transaction as "additive rather than transformative" given MFIC's size relative to ARCC, and indicated no anticipated slowdown in origination activity around the closing. He noted that "the vast majority of the discount was concentrated in a small percentage of investments" involving greater uncertainty of business outcomes and wider bid-ask spreads, while the broader portfolio was described as "largely a performing portfolio."

CFO Lem stated that existing liquidity, combined with the $750 million funding facility upsize, provides "sufficient capacity to acquire the MFIC portfolio without the need for additional debt capital." Historical repayment rates from ARCC's portfolio were cited at approximately 30% to 35%. Schnabel also noted that Ivy Hill, an affiliated vehicle, "is expected to play a role in the transaction," though he stated "nothing is definitive yet."

What Was Disclosed

The filing disclosed ARCC's agreement to acquire MFIC, including expected modest core earnings per share accretion, a $750 million upsized funding facility commitment, portfolio scale additions of over 200 incumbent positions, and commentary on the discount structure and Ares management's cash contribution to the deal.