8-K: MidCap Financial Investment Corp. Secures Stockholder Approval for Mergers with Apollo Funds

MidCap Financial Investment Corporation has received stockholder approval to merge with Apollo Senior Floating Rate Fund and Apollo Tactical Income Fund.

Summary

• MidCap Financial Investment Corporation (MFIC) has announced that stockholders of Apollo Senior Floating Rate Fund (AFT) and Apollo Tactical Income Fund (AIF) have approved the mergers of AFT and AIF into MFIC.
• Approximately 88% of AFT's common shares represented at its special meeting, or about 53% of AFT's outstanding shares, voted in favor of the merger.
• Similarly, approximately 87% of AIF's common shares represented at its special meeting, or about 53% of AIF's outstanding shares, voted in favor of the merger.
• MFIC's stockholders had previously approved the mergers on May 28, 2024.
• The mergers are expected to close in late July, subject to customary closing conditions.
• Upon closing, AFT and AIF stockholders will receive MFIC shares with a net asset value (NAV) equal to the NAV of their existing shares in each respective fund.
• The NAVs will be adjusted for any undistributed net investment income and capital gains prior to closing.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the successful stockholder approvals and the clear timeline for the merger. The language is professional and confident, indicating a smooth process.

Positives

• The successful stockholder votes indicate strong support for the mergers.
• The mergers are expected to close in late July, providing a clear timeline for completion.
• The exchange of shares based on NAV ensures a fair transaction for AFT and AIF stockholders.
• The combined entity will continue to trade on the Nasdaq Global Select Market under the ticker symbol MFIC.

Risks

• The mergers are subject to customary closing conditions, which could potentially delay or prevent the transaction.
• There are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected.

Future Outlook

The mergers are expected to close in late July, subject to customary closing conditions. The surviving entity will continue to trade on the Nasdaq Global Select Market under the ticker symbol MFIC.

Industry Context

This merger is part of a trend of consolidation within the investment management industry, particularly among closed-end funds, as companies seek to achieve greater scale and efficiency. The merger will combine the assets of three investment companies under the MidCap Financial Investment Corporation umbrella.

Comparison to Industry Standards

• Mergers of closed-end funds are not uncommon, with similar transactions including the merger of Nuveen closed-end funds in 2023 and the merger of several Eaton Vance funds in 2021.
• The approval rates of 88% and 87% for AFT and AIF respectively are generally considered strong and indicate a high level of shareholder support for the transaction, which is comparable to other successful fund mergers.
• The use of NAV as the basis for share exchange is a standard practice in fund mergers, ensuring that shareholders receive fair value for their holdings.

Stakeholder Impact

• Shareholders of AFT and AIF will receive MFIC shares based on the NAV of their existing shares.
• The combined entity will continue to trade on the Nasdaq Global Select Market under the ticker symbol MFIC.

Next Steps

• The mergers are expected to close in late July, subject to customary closing conditions.
• The final voting results are subject to certification by the inspector of election of the AFT and AIF special meetings of stockholders.

Key Dates

Keywords

merger, acquisition, MidCap Financial Investment Corporation, Apollo Senior Floating Rate Fund, Apollo Tactical Income Fund, stockholder approval, business development company, investment company, closed-end fund, NAV