Ares Capital has agreed to acquire American Capital, a US-based private equity firm and global asset manager, in a cash-stock deal worth about $3.43bn.
Under the terms of the deal, shareholders of American Capital will get $6.41 per share in cash and 0.483 Ares Capital shares for each share held. Ares Capital shareholders will own a stake of about 73.9% in the combined entity, while American Capital shareholders will own the remaining 26.1%.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Together, the two companies will have over $13bn in pro forma investments based on market values as of 31 March 2016.
The merged company will be externally managed by Ares Capital Management, with existing Ares Capital officers and directors continuing in their existing roles.
The deal excludes the sale of American Capital Mortgage Management, which will be offloaded to American Capital Agency in a separate deal worth $562m.
Ares Capital CEO Kipp deVeer said: "Similar to the strategy we successfully utilized in our acquisition of Allied Capital in 2010, we plan to leverage our robust origination platform to redeploy American Capital’s portfolio into directly-originated investments generating a higher level of current income and ultimately improved risk-adjusted returns.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData"We are confident in our ability to maximize long-term value for both Ares Capital and American Capital shareholders."
The transaction has already been approved by the boards of directors of both firms. It is expected to be completed within the next 12 months, subject to shareholders’ and regulatory approvals.
