ARES CAPITAL CORPORATION (NYSE:AFC) Files An 8-K Completion of Acquisition or Disposition of Assets
Item 2.01 Completion of Acquisition or Disposition of Assets.
On January3, 2017, Ares Capital Corporation (the Registrant)
completed its acquisition of American Capital to the terms and
conditions of the Agreement and Plan of Merger, dated May23, 2016
(the Merger Agreement), among the Registrant, American
Capital,Ltd. (American Capital), Orion Acquisition Sub,Inc., a
wholly owned subsidiary of the Registrant (Acquisition Sub),Ivy
Hill Asset Management L.P, a wholly owned portfolio company of
the Registrant (IHAM),Ivy Hill Asset Management GP, LLC, in its
capacity as general partner of IHAM, American Capital Asset
Management, LLC, a wholly owned portfolio company of American
Capital (ACAM), and solely for the limited purposes set forth
therein, Ares Capital Management LLC, the Registrants investment
adviser (Ares Capital Management). To effect the acquisition,
(i)Acquisition Sub merged with and into American Capital, with
American Capital remaining as the surviving entity in such merger
as a wholly owned subsidiary of the Registrant and (ii)ACAM
merged with and into IHAM, with IHAM remaining as the surviving
entity in such merger as a wholly owned portfolio company of the
Registrant (collectively, the mergers). Immediately following the
mergers, American Capital converted into a Delaware limited
liability company and withdrew its election as a business
development company (as defined in the Investment Company Act of
1940, as amended).
to the Merger Agreement, American Capital stockholders received
the right to the following merger consideration for each share of
American Capital common stock owned: (i)$6.48 per share in cash
from the Registrant (including a make-up dividend in the amount
of $0.07 per share), (ii)0.483 shares of the Registrants common
stock for each share of American Capital common stock held
immediately prior to the mergers, (iii)$2.45 per share in cash,
which amount represents the per share cash consideration paid to
American Capital to the sale by ACAM of American Capital Mortgage
Management,LLC to American Capital Agency Corp., which was
completed on July1, 2016 and (iv)approximately $1.20 per share in
cash from Ares Capital Management, acting solely on its own
In connection with the American Capital acquisition, Ares Capital
Management has agreed to waive up to $100 million in income based
fees from the Registrant for the first ten calendar quarters
beginning with the second quarter of 2017, in an amount equal to
the lesser of (1)$10 million of the income based fees and (2)the
amount of income based fees for each such quarter, in each case,
to the extent earned and payable by the Registrant in such
quarter to and as calculated under the Registrants investment
advisory and management agreement (the Fee Waiver).
The foregoing descriptions of the mergers, the Merger Agreement
and the Fee Waiver are qualified in their entirety by reference
to the Merger Agreement and Transaction Support Agreement, as
applicable, copies of which were attached as Exhibit2.1 and
Exhibit99.1, as applicable, to the Registrants Current Report on
Form8-K filed with the SEC on May26, 2016 and are incorporated
herein by reference.
Item7.01 Regulation FD Disclosure.
On January3, 2017, the Registrant issued a press release,
included herewith as Exhibit99.1, and by this reference
The information disclosed under this Item 7.01, including
Exhibit99.1 hereto, is being furnished and shall not be deemed
filed for purposes of Section18 of the Securities Exchange Act of
1934 and shall not be deemed incorporated by reference into any
filing made under the Securities Act of 1933, except as expressly
set forth by specific reference in such filing.
Item 9.01Financial Statements and
(a) Financial statements of businesses acquired.
The consolidated balance sheets of American Capital and
subsidiaries as of September30, 2016 (unaudited) and December31,
2015, the consolidated statements of operations for the three and
nine months ended September30, 2016 and 2015 (unaudited), the
consolidated statements of cash flows for the nine months ended
and 2015 (unaudited), and the consolidated schedule of
investments as of September30, 2016 (unaudited) and December31,
2015, and the notes related thereto, are filed hereto as
Exhibit99.2 and are incorporated herein by reference.
(b) Pro forma financial information.
The unaudited pro forma condensed consolidated financial
information of the Registrant and American Capital reflecting
the unaudited pro forma condensed consolidated balance sheet as
of September30, 2016 and the unaudited pro forma condensed
consolidated income statement for the nine months ended
September30, 2016 and the year ended December31, 2015, and the
notes thereto, is filed hereto as Exhibit99.3 and is
incorporated herein by reference.
Press Release, dated as of January3, 2017
American Capital,Ltd. Consolidated Financial Statements
Unaudited Pro Forma Condensed Consolidated Financial
ARES CAPITAL CORPORATION (NYSE:AFC) Recent Trading Information
ARES CAPITAL CORPORATION (NYSE:AFC) closed its last trading session down -0.01 at 25.25 with 7,604 shares trading hands.