MidCap Financial Investment Corporation (NASDAQ: MFIC) has completed mergers with Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) and Apollo Tactical Income Fund Inc. (NYSE: AIF), resulting in the formation of a combined company that will continue to trade on the NASDAQ Global Select Market under the ticker symbol "MFIC." As part of the mergers, former AFT stockholders received 0.9547 shares of MFIC common stock for each share of AFT common stock they held, while former AIF stockholders received 0.9441 shares of MFIC common stock for each share of AIF common stock they held.
The final exchange ratios were determined based on various net asset values (NAVs) per share. As of July 19, 2024, MFIC's NAV per share was $15.43, AFT's NAV per share was $14.73, and AIF's NAV per share was $14.57. Comparatively, 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. This reflects an increase in MFIC's NAV per share from June 30, 2024, to July 19, 2024, primarily due to the accrual of net income.
Following 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. The mergers are expected to qualify as tax-free reorganizations for federal tax purposes.
As of the closing of the mergers, the combined company has $3.07 billion in investments at fair value and net assets of $1.45 billion. The net leverage ratio stands at 1.13x, and there are 93.8 million common shares outstanding. Additionally, 2.3% of total investments are on non-accrual status at amortized cost, and 1.8% at fair value. As of the closing of the mergers, 11 companies were on non-accrual status, including 6 companies acquired from the CEFs' portfolios.
In connection with the mergers, 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.
MidCap Financial Investment Corporation 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 company's investment objective is to generate current income and, to a lesser extent, long-term capital appreciation, primarily investing in directly originated and privately negotiated first lien senior secured loans to privately held U.S. middle-market companies.
The mergers were advised by financial and legal entities including Lazard, Proskauer Rose LLP, Keefe, Bruyette & Woods Inc., Dechert LLP, and Simpson Thacher & Bartlett LLP. As a result of these announcements, the company's shares have moved 1.5% on the market, and are now trading at a price of $15.57. For the full picture, make sure to review MidCap Financial Investment's 8-K report.
