Ares Capital to acquire American Capital for $3.4B

Private equity firm Ares Capital reached a deal to acquire investment firm American Capital in a cash-and-stock transaction worth $3.4 billion, the companies said Monday.

As part of the agreement, American Capital (ACAS) will jettison American Capital Mortgage Management in a $562 million sale to American Capital Agency.

Together, Ares (ARCC) and American Capital will have more than $13 billion of investments based on market values as of March 31.

The deal values American Capital at $17.40 per diluted share, marking an 11.4% premium over Friday's closing price.

American Capital, a publicly traded private equity firm, originates and underwrites investments in other private equity, real estate and structured investments.

Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.