Ares Capital Corp. has agreed to acquire a rival business-development company from Apollo Global Management. The deal will push Ares Capital’s total assets past $31 billion.
The transaction involves merging two business-development companies, or BDCs. BDCs are publicly traded firms that lend to mid-sized private companies.
The acquisition strengthens Ares in the private-credit market, where nonbank lenders play a growing role. Private credit has expanded rapidly as banks pull back from certain lending.
Apollo is selling the competitor as part of a broader shift in its own credit strategy. The firm continues to manage a large private-credit business of its own.
The combined entity will rank among the largest publicly traded BDCs. Scale matters in this sector because it supports access to capital and broader deal flow.
The merger requires regulatory and shareholder approvals. Terms of the deal were not fully disclosed in the initial announcement.
Private-credit deals have accelerated as investors seek higher yields. Consolidation among lenders is expected to continue as competition for assets intensifies.
