Ares Capital to acquire competitor Allied Capital in $648m deal

Following the transaction, Ares stockholders will own approximately 65 per cent of the combined company and Allied stockholders will own approximately 35 per cent.

Last month, Allied was involved in a debt restructuring of its private notes and bank facility.

Ares and Allied operate in the same space, investing debt and equity in US middle-market companies. Ares is managed by Ares Capital Management, which will now oversee Allied’s operations.

The combined company, which has a portfolio valued at $4.5bn, hopes that its enlarged balance sheet will allow it to complete bigger transactions and that it will be able to expand the breadth of its relationship network, particularly within the private equity community.

Michael Arougheti, president of Ares Capital, said, "We believe this transaction presents an extraordinary opportunity for value creation for both Ares Capital and Allied Capital stockholders. This transformative transaction creates a middle-market capital provider with leading market coverage, access to capital, scale and diversification. We believe that our portfolio composition and prudent balance sheet management throughout the current cycle have positioned us to deliver value for our stockholders and to be an industry consolidator.”

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