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 $15.43, AFT’s NAV per share of
$14.73, and AIF’s NAV per share of $14.57, each calculated as of
July 19, 2024. As of June 30, 2024, MFIC’s NAV per share was
$15.38, AFT’s NAV per share was $14.89, and AIF’s NAV per share was
$14.77. MFIC’s NAV per share as of June 30, 2024 reflects net
investment income of $0.45 per share for the June quarter and
certain adjustments to the fair value of its investment portfolio.
The change in MFIC’s NAV per share between June 30, 2024 and July
19, 2024 was primarily the result of the accrual of net income. The
change in the CEFs’ NAVs per share between June 30, 2024 and July
19, 2024 was primarily the result of the accrual of net income and
the pre-merger distributions that were declared and paid to their
respective stockholders. As a result of the mergers, legacy MFIC
stockholders, former AFT stockholders, and former AIF stockholders
own approximately 69.6%, 15.8%, and 14.6%, respectively, of the
combined company. Each merger is expected to qualify as a tax-free
reorganization for federal tax purposes.
Certain financial highlights for the combined
company as of the closing of the mergers include:
Investments, at fair value: |
$3.07 billion |
Net assets: |
$1.45 billion1 |
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: |
2.3%/1.8%4 |
________________________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 $0.20 per share, to be payable on August 15, 2024, to MFIC
stockholders of record as of August 5, 2024.
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 $75 million in EBITDA, as may be adjusted
for market disruptions, mergers and acquisitions-related charges
and synergies, and other items. To a lesser extent, MFIC may invest
in other types of securities including, first lien unitranche,
second lien senior secured, unsecured, subordinated, and mezzanine
loans, and equities in both private and public middle market
companies. For more information, please visit
www.midcapfinancialic.com.
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 BesenInvestor Relations Manager for
MFIC212.822.0625ebesen@apollo.com
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