Ares Capital to Acquire Apollo-Backed MidCap Financial for $2.6B While Q3 Earnings Disappoint

Ares Capital Corporation announced on October 27 that it has entered into a definitive merger agreement to acquire MidCap Financial Investment Corporation, an Apollo-affiliated business development company, in a stock-and-cash transaction totaling approximately $2.6 billion in enterprise value. Under the terms of the deal, MFIC shareholders will receive $10.88 per fully diluted share. The acquisition is expected to push Ares Capital's total assets past $31 billion, further cementing its position as the largest publicly traded business development company in the United States.

MFIC shares surged roughly 20 to 23 percent in premarket trading on the news, while ARCC shares fell approximately 2 percent, a reaction compounded by a simultaneous miss on third quarter earnings. Ares Capital reported non-GAAP EPS of $0.46 for the quarter ended September 2026, missing consensus estimates by $0.02, while revenue of $763 million fell short of expectations by $13.12 million. Profit declined from the same period a year earlier.

The earnings shortfall was driven in part by a sharply slower deal environment. Gross commitments dropped 46.3 percent year over year to $2.11 billion in the third quarter, though management signaled expectations for a surge in transaction activity in the fourth quarter. Dividend income rose 13.5 percent year over year. Alongside the earnings release, Ares Capital declared a quarterly dividend of $0.48 per share, holding the payout at the level analysts had flagged as a key threshold to watch.