MidCap Financial Investment Corporation Completes Mergers with Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc.
MidCap Financial Investment (NASDAQ: MFIC) has completed its mergers with Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) and Apollo Tactical Income Fund Inc. (NYSE: AIF). The combined company will operate as MFIC and continue trading on Nasdaq. Former AFT stockholders will receive 0.9547 MFIC shares per AFT share, while former AIF stockholders will receive 0.9441 MFIC shares per AIF share.
Post-merger, legacy MFIC stockholders own 69.6%, former AFT 15.8%, and former AIF 14.6% of the combined company. Key financial highlights include $3.07 billion in investments at fair value, $1.45 billion in net assets, and a 1.13x net leverage ratio. MFIC's Board declared a special distribution of $0.20 per share, payable on August 15, 2024, to stockholders of record as of August 5, 2024.
MidCap Financial Investment (NASDAQ: MFIC) ha completato le sue fusioni con Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) e Apollo Tactical Income Fund Inc. (NYSE: AIF). La società risultante opererà come MFIC e continuerà a essere quotata al Nasdaq. Gli azionisti di AFT riceveranno 0.9547 azioni MFIC per ogni azione AFT, mentre gli azionisti di AIF riceveranno 0.9441 azioni MFIC per ogni azione AIF.
Dopo la fusione, gli azionisti storici di MFIC possiedono il 69.6%, gli ex azionisti di AFT il 15.8% e gli ex azionisti di AIF il 14.6% della società risultante. I principali dati finanziari includono investimenti per un valore equo di 3.07 miliardi di dollari, 1.45 miliardi di dollari in attivi netti e un rapporto di leva finanziaria netto di 1.13x. Il Consiglio di MFIC ha dichiarato una distribuzione straordinaria di 0.20 dollari per azione, che sarà pagata il 15 agosto 2024, agli azionisti registrati al 5 agosto 2024.
MidCap Financial Investment (NASDAQ: MFIC) ha completado sus fusiones con Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) y Apollo Tactical Income Fund Inc. (NYSE: AIF). La empresa combinada operará como MFIC y continuará negociándose en Nasdaq. Los accionistas anteriores de AFT recibirán 0.9547 acciones de MFIC por cada acción de AFT, mientras que los accionistas anteriores de AIF recibirán 0.9441 acciones de MFIC por cada acción de AIF.
Tras la fusión, los accionistas de MFIC poseen el 69.6%, los antiguos de AFT el 15.8% y los antiguos de AIF el 14.6% de la empresa combinada. Los aspectos financieros destacados incluyen $3.07 mil millones en inversiones a valor justo, $1.45 mil millones en activos netos y una relación de apalancamiento neto de 1.13x. La Junta de MFIC declaró una distribución especial de $0.20 por acción, pagadera el 15 de agosto de 2024, a los accionistas registrados hasta el 5 de agosto de 2024.
MidCap Financial Investment (NASDAQ: MFIC)는 Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) 및 Apollo Tactical Income Fund Inc. (NYSE: AIF)와의 합병을 완료했습니다. 통합된 회사는 MFIC라는 이름으로 운영되며 Nasdaq에서 계속 거래됩니다. 이전 AFT 주주들은 AFT 주식 1주당 0.9547 MFIC 주식을, 이전 AIF 주주들은 AIF 주식 1주당 0.9441 MFIC 주식을 받게 됩니다.
합병 후, 기존 MFIC 주주는 69.6%, 이전 AFT 주주는 15.8%, 이전 AIF 주주는 14.6%를 차지하게 됩니다. 주요 재무 사항으로는 공정 가치 기준으로 30억 7천만 달러의 투자, 14억 5천만 달러의 순 자산, 1.13배의 순 레버리지 비율이 포함됩니다. MFIC 이사회는 2024년 8월 15일에 주주들에게 주당 0.20달러의 특별 분배금을 지급하기로 결정했습니다. 주주 명부 기준일은 2024년 8월 5일입니다.
MidCap Financial Investment (NASDAQ: MFIC) a finalisé ses fusions avec Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) et Apollo Tactical Income Fund Inc. (NYSE: AIF). La société combinée fonctionnera sous le nom de MFIC et continuera à être cotée sur le Nasdaq. Les anciens actionnaires de AFT recevront 0.9547 actions MFIC pour chaque action AFT, tandis que les anciens actionnaires de AIF recevront 0.9441 actions MFIC pour chaque action AIF.
Après la fusion, les anciens actionnaires de MFIC détiennent 69.6%, les anciens de AFT 15.8% et les anciens de AIF 14.6% de la société combinée. Les points forts financiers incluent 3.07 milliards de dollars en investissements à valeur équitable, 1.45 milliard de dollars d'actifs nets et un ratio d'endettement net de 1.13x. Le Conseil d'administration de MFIC a déclaré une distribution exceptionnelle de 0.20 dollar par action, payable le 15 août 2024, aux actionnaires enregistrés au 5 août 2024.
MidCap Financial Investment (NASDAQ: MFIC) hat seine Fusionen mit Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) und Apollo Tactical Income Fund Inc. (NYSE: AIF) abgeschlossen. Das kombinierte Unternehmen wird als MFIC operieren und weiterhin an der Nasdaq gehandelt. Ehemalige AFT-Aktionäre erhalten 0.9547 MFIC-Aktien pro AFT-Aktie, während ehemalige AIF-Aktionäre 0.9441 MFIC-Aktien pro AIF-Aktie erhalten.
Nach der Fusion besitzen die bisherigen MFIC-Aktionäre 69.6%, ehemalige AFT-Aktionäre 15.8% und ehemalige AIF-Aktionäre 14.6% des kombinierten Unternehmens. Die wichtigsten finanziellen Eckdaten umfassen 3.07 Milliarden Dollar an Investitionen zu Handelswert, 1.45 Milliarden Dollar an Nettovermögen und ein Nettoverschuldungsverhältnis von 1.13x. Der Vorstand von MFIC erklärte eine Sonderverteilung von 0.20 Dollar pro Aktie, die am 15. August 2024 zahlbar ist, an die Aktionäre, die am 5. August 2024 im Aktienregister stehen.
- Completed mergers with Apollo Senior Floating Rate Fund and Apollo Tactical Income Fund, potentially expanding MFIC's market presence
- Combined company has $3.07 billion in investments at fair value and $1.45 billion in net assets
- Special distribution of $0.20 per share declared for MFIC stockholders
- Net leverage ratio of 1.13x, indicating a manageable debt level
- Only 2.3% of total investments on non-accrual status at amortized cost (1.8% at fair value)
- Potential dilution for existing MFIC shareholders as new shares were issued to former AFT and AIF stockholders
- Integration challenges may arise from merging three separate entities
- Increase in non-accrual investments from 6 companies acquired from CEF portfolios
Insights
The merger of MidCap Financial Investment Corporation (MFIC) with Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc. is a significant move considering the size and implications for the combined entity. The new combined company's investments are valued at
The exchange ratio for AFT and AIF stockholders means they now hold shares in MFIC, providing them with a stake in a more substantial entity. This structural expansion can lead to economies of scale and enhanced bargaining power in financial markets. Additionally, a special distribution of
It's important to note the leverage ratio of 1.13x, indicating a moderately leveraged balance sheet. This could lead to higher returns on equity, but it also entails higher risk if the financial environment becomes unfavorable.
From a legal perspective, the mergers qualify as tax-free reorganizations under federal tax laws, which is beneficial for stockholders as it avoids immediate tax liabilities on stock exchanges. This consideration is particularly important for investors who need to manage their tax exposure carefully.
The involvement of multiple legal advisors, including Proskauer Rose LLP, Dechert LLP and Simpson Thacher & Bartlett LLP, assures that due diligence was thoroughly conducted, mitigating risks related to legal disputes or regulatory issues post-merger.
Furthermore, the legal counsel's role in ensuring compliance with securities regulations and the structured transition of shares emphasizes the robustness and legality of the merger process. Investors can be reasonably assured that their interests are protected within the legal frameworks.
Market dynamics suggest that MFIC's enhanced portfolio and increased scale post-merger could lead to improved market positioning. The announcement of new shares and the special distribution aligns with market expectations, aiming to retain shareholder trust and provide immediate value.
The net investment income of
Looking at the non-accrual status, which stands at 2.3% at amortized cost and 1.8% at fair value, it reveals a relatively low level of underperforming assets – a positive sign for the health of the combined portfolio. This metric is important for retail investors as it highlights the quality of the investment portfolio and future income predictability.
MFIC Declares Special Distribution of
NEW YORK, July 22, 2024 (GLOBE NEWSWIRE) -- MidCap Financial Investment Corporation (NASDAQ: MFIC) today announced that it has completed its previously announced mergers with Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) and Apollo Tactical Income Fund Inc. (NYSE: AIF) (AFT and AIF, together, the “CEFs”). The combined company will operate as MidCap Financial Investment Corporation and will continue to trade on the Nasdaq Global Select Market under the ticker symbol “MFIC.”
In connection with the closing of the mergers, former AFT stockholders will receive 0.9547 shares of MFIC common stock for each share of AFT common stock they held prior to the closing based on the final exchange ratio, subject to adjustments for cash payable in lieu of fractional shares. In addition, former AIF stockholders will receive 0.9441 shares of MFIC common stock for each share of AIF common stock they held prior to the closing based on the final exchange ratio, subject to adjustments for cash payable in lieu of fractional shares.
The final exchange ratios were based on MFIC’s net asset value (“NAV”) per share of
Certain financial highlights for the combined company as of the closing of the mergers include:
| Investments, at fair value: | |
| Net assets: | |
| Net leverage ratio: | 1.13x1,2 |
| Common shares outstanding: | 93.8 million1,3 |
| % of total investments on non-accrual status, at amortized cost / at fair value: |
________________________
1 Subject to adjustments for cash payable to former AFT and AIF stockholders in lieu of fractional shares.
2 MFIC’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.
3 As of result of the mergers, MFIC issued approximately 28.5 million shares of common stock to former AFT and AIF stockholders.
4 As of the closing of the mergers, 11 companies were on non-accrual status, including 6 companies acquired from the CEF’s portfolios.
Financial highlights presented above exclude any impact from purchase accounting adjustments.
In connection with the closing of the mergers, on July 21, 2024, MFIC’s Board of Directors declared a distribution of
In connection with the mergers, Lazard served as financial advisor and Proskauer Rose LLP as legal counsel to the special committee of MFIC. Keefe, Bruyette & Woods Inc., A Stifel Company, served as financial advisor and Dechert LLP as legal counsel to the special committees of the CEFs. Simpson Thacher & Bartlett LLP served as legal counsel to MFIC, AFT and AIF with respect to the mergers.
About MidCap Financial Investment Corporation
MidCap Financial Investment Corporation (NASDAQ: MFIC) is a closed-end, externally managed, diversified management investment company that has elected to be treated as a business development company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). For tax purposes, MFIC has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). MFIC is externally managed by Apollo Investment Management, L.P. (the “MFIC Adviser”), an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (“Apollo”), a high-growth global alternative asset manager. MFIC’s investment objective is to generate current income and, to a lesser extent, long-term capital appreciation. MFIC primarily invests in directly originated and privately negotiated first lien senior secured loans to privately held U.S. middle-market companies, which MFIC generally defines as companies with less than
Forward-Looking Statements
Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition or the mergers of AFT and AIF with and into MFIC (the “Mergers”). The forward-looking statements may include statements as to: future operating results of MFIC as the combined company following the Mergers, and distribution projections; business prospects of MFIC as the combined company following the Mergers and the prospects of its portfolio companies; and the impact of the investments that MFIC as the combined company following the Mergers expects to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including those set forth in the “Special Note Regarding Forward-Looking Statements” section in our registration statement on Form N-14 (333-275640) previously filed with the Securities and Exchange Commission (the “SEC”). MFIC has based the forward-looking statements included in this press release on information available to it on the date hereof, and MFIC assumes no obligation to update any such forward-looking statements. Although MFIC undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that it may make directly to you or through reports that MFIC in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.
Contact
Elizabeth Besen
Investor Relations Manager for MFIC
212.822.0625
ebesen@apollo.com
FAQ
What is the exchange ratio for MFIC's merger with AFT and AIF?
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What is MFIC's net leverage ratio after the mergers?
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What percentage of MFIC's total investments are on non-accrual status after the mergers?
