Ares Capital is Making a $2.6 Billion Acquisition. Here’s What it Means for its 10%-Yielding Dividend.

Ares Capital agreed to acquire MidCap Financial for $2.6 billion in a cash-and-stock deal, paying $10.88 per share (30.1% premium). The merger will expand Ares Capital's portfolio to over $31 billion across 800+ companies, increase core earnings per share, and provide further support for its 10%+ dividend yield. While the deal introduces some risk from MidCap's recent dividend cut and credit weaknesses, it should strengthen Ares Capital's competitive position as a leading BDC.