MidCap Financial Investment Corporation filed an 8-K on October 27, 2026, disclosing that on October 26, 2026, it entered into an Agreement and Plan of Merger with Ares Capital Corporation under which each MFIC share would be converted into total consideration of $10.88 per fully diluted share.

Key Highlights

  • Total merger consideration: $10.88 per fully diluted share of MFIC Common Stock, consisting of approximately $1.21 per share in cash and approximately $9.67 per share in ARCC Common Stock, subject to adjustment.
  • Cash component paid by ACM: $1.21 per share in cash, without interest, to be paid by Ares Capital Management LLC, the external investment adviser to ARCC.
  • Two-step merger structure: Acquisition Sub 1 will first merge with and into MFIC, then MFIC will merge with and into Acquisition Sub 2, with ARCC as the ultimate parent.
  • Unanimous board approvals: Both the MFIC Board (on recommendation of a Special Committee of disinterested directors) and the ARCC Board unanimously approved the Merger Agreement and the transactions.
  • Termination fee: MFIC will be required to pay ARCC a termination fee of $31,360,000 under certain specified circumstances.
  • Expected closing: The merger is currently anticipated to occur during the first half of calendar year 2027, subject to MFIC stockholder approval and other closing conditions.
  • Share repurchase suspended: MFIC has agreed to suspend its share repurchase program pending closing of the mergers.

MFIC-ARCC Merger Terms, Structure, and Conditions

According to the filing, MidCap Financial Investment Corporation (NASDAQ:MFIC) entered into the Merger Agreement on October 26, 2026, with Ares Capital Corporation ("ARCC"), two ARCC subsidiaries, and Ares Capital Management LLC ("ACM"). Under the agreement, each share of MFIC Common Stock (par value $0.001) outstanding at the effective time of the First Merger will be converted into the right to receive $1.21 in cash from ACM and a number of ARCC Common Stock shares determined by an "Exchange Ratio," with cash paid in lieu of fractional shares. The filing states that as of the date of the Merger Agreement, the total consideration represents $10.88 per fully diluted share.

The Exchange Ratio will be calculated no earlier than 48 hours before the effective time based on ARCC's net asset value per share ("ARCC NAV") and ARCC's closing stock price on that date ("ARCC Price"), using one of three formulas depending on whether the ARCC Price is at, below, or above 100% or 104.5% of ARCC NAV. The stock portion of the consideration will be reduced by any per share "Tax Dividend" declared by MFIC after signing with a record date on or before the closing date, excluding regular quarterly dividends. The parties intend for the mergers, taken together, to be treated as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, according to the filing.

The filing discloses that closing is subject to conditions including MFIC stockholder approval, listing authorization on the NASDAQ Global Select Market for ARCC Common Stock to be issued in the First Merger, and effectiveness of a registration statement on Form N-14. The Merger Agreement may be terminated if the First Merger has not been consummated within nine months of signing, subject to an automatic three-month extension in certain circumstances. The filing also notes that holders of MFIC Common Stock will not be entitled to appraisal or objecting stockholder rights in connection with the mergers.

What Was Disclosed

MFIC filed an 8-K disclosing its October 26, 2026 entry into a merger agreement with Ares Capital Corporation, detailing the $10.88 per fully diluted share consideration, the two-step merger structure, a $31,360,000 termination fee, and an expected closing in the first half of 2027.