Ares gets green light for American Capital merger

Ares Capital Corporation and American Capital will combine to create a $12bn business development company. 

Ares Capital Corporation – the business development company owned by Ares Management – cleared its last major hurdle to closing its $3.43 billion merger with American Capital, or $14.95 a share, a combination that will create a $12 billion company.

Shareholders of both companies voted overwhelmingly in favour of the transaction, which is scheduled to close the first week of January, the companies announced Thursday. In a separate transaction, American Capital Mortgage Management acquired American Capital Agency Corp. for $2.45 per share, or $562 million.

“We would like to thank both our shareholders and American Capital’s shareholders for their very strong support throughout this process and the high confidence they have placed in us,” Ares CEO Kipp deVeer (pictured) said in a statement. “We are excited to move towards closing this merger, which we believe will generate many financial and strategic benefits for both shareholder bases.”

The merger puts Ares in familiar territory. In 2010, the firm acquired Allied Capital – the largest BDC transaction at the time – in an all-stock sale valued at $648 million, or $3.47 per Allied Capital share.