Ares Capital to buy Allied Capital in $648M deal

posted: 31 DAYS 14 HOURS AGO

Text SizeAAA

NEW YORK -Finance company Ares Capital Corp. said Monday that it will buy Allied Capital Corp., which provides financing for buyouts, in an all-stock deal worth $648 million.

The acquisition values Allied's stock at $3.47 per share, a 27 percent premium over the company's $2.73 Friday closing stock price.

Allied stockholders will receive 0.325 share of Ares for each Allied stock they own. This ends up in about 58.3 million Ares shares being issued in exchange for the approximately 179.4 million outstanding Allied shares.

The deal gives Ares shareholders an approximately 65 percent stake of the combined company, with Allied stockholders owning the remaining 35 percent.

The combined company will likely include one of Allied's board members. Ares Chairman Bennett Rosenthal, President Michael Arougheti and Chief Financial Officer Richard Davis will continue in their respective roles.

Both companies' boards unanimously approved the acquisition. The deal still needs the approval of both companies' shareholders as well as some lender consents.

The acquisition is targeted to close by the first quarter's end.

Shares of Ares Capital added 98 cents, or 9.2 percent, to $11.67 in morning trading. The stock hit a fresh 52-week high of $11.68 earlier in the session. Allied Capital's stock surged 71 cents, or 26 percent, to $3.44. The shares have traded in a range of 58 cents to $7.87 over the last year.

2009-10-26 11:10:36