MidCap Financial Investment Corp NY false 0001278752 0001278752 2024-07-22 2024-07-22 0001278752 us-gaap:CommonStockMember 2024-07-22 2024-07-22 0001278752 us-gaap:DeferrableNotesMember 2024-07-22 2024-07-22

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 22, 2024

 

 

MidCap Financial Investment Corporation

(Exact name of Registrant as specified in its charter)

 

 

 

Maryland   814-00646   52-2439556

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

9 West 57th Street New York, New York   10019
(Address of principal executive offices)   (Zip Code)

(Registrant’s telephone number, including area code): (212) 515-3450

None

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.001 par value   MFIC   NASDAQ Global Select Market
8.00% Notes due 2028   MFICL   NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 2.01

Completion of Acquisition or Disposition of Assets.

AFT Mergers

On July 22, 2024, MidCap Financial Investment Corporation, a Maryland corporation (the “Company”), completed its previously announced acquisition of Apollo Senior Floating Rate Fund Inc., a Maryland corporation (“AFT”), pursuant to that certain Agreement and Plan of Merger (the “AFT Merger Agreement”), dated as of November 7, 2023, by and among the Company, AFT, AFT Merger Sub, Inc., a Maryland corporation and a direct wholly-owned subsidiary of the Company (“AFT Merger Sub”), and, solely for the limited purposes set forth therein, Apollo Investment Management, L.P., a Delaware limited partnership and the Company’s investment adviser (the “Adviser”). Pursuant to the AFT Merger Agreement, AFT Merger Sub was first merged with and into AFT, with AFT continuing as the surviving company (the “AFT First Merger”), and, following the effectiveness of the AFT First Merger, AFT was then merged with and into the Company, with the Company continuing as the surviving company (together with the AFT First Merger, the “AFT Mergers”).

In accordance with the terms of the AFT Merger Agreement, at the effective time of the AFT First Merger, each outstanding share of common stock, par value $0.001 per share, of AFT was converted into the right to receive 0.9547 shares of common stock, par value $0.001 per share, of the Company. As a result, the Company issued an aggregate of approximately 14,868,092 shares of its common stock to AFT’s former stockholders.

The foregoing description of the AFT Merger Agreement is a summary only and is qualified in its entirety by reference to the full text of the AFT Merger Agreement, a copy of which was filed by the Company as Exhibit 2.1 to its Current Report on Form 8-K, filed on November 7, 2023.

AIF Mergers

On July 22, 2024, the Company completed its previously announced acquisition of Apollo Tactical Income Fund Inc., a Maryland corporation (“AIF”), pursuant to that certain Agreement and Plan of Merger (the “AIF Merger Agreement”), dated as of November 7, 2023, by and among the Company, AIF, AIF Merger Sub, Inc., a Maryland corporation and a direct wholly-owned subsidiary of the Company (“AIF Merger Sub”), and, solely for the limited purposes set forth therein, the Adviser. Pursuant to the AIF Merger Agreement, AIF Merger Sub was first merged with and into AIF, with AIF continuing as the surviving company (the “AIF First Merger”), and, following the effectiveness of the AIF First Merger, AIF was then merged with and into the Company, with the Company continuing as the surviving company (together with the AIF First Merger, the “AIF Mergers” and, together with the AFT Mergers, the “Mergers”).

In accordance with the terms of the AIF Merger Agreement, at the effective time of the AIF First Merger, each outstanding share of common stock, par value $0.001 per share, of AIF was converted into the right to receive 0.9441 shares of common stock, par value $0.001 per share, of the Company. As a result, the Company issued an aggregate of approximately 13,658,992 shares of its common stock to AIF’s former stockholders.

The foregoing description of the AIF Merger Agreement is a summary only and is qualified in its entirety by reference to the full text of the AIF Merger Agreement, a copy of which was filed by the Company as Exhibit 2.2 to its Current Report on Form 8-K, filed on November 7, 2023.

 

Item 7.01

Regulation FD Disclosure.

On July 22, 2024, the Company issued a press release announcing the completion of the Mergers. A copy of the press release is furnished herewith as Exhibit 99.1.

The information disclosed under this Item 7.01, including Exhibit 99.2 hereto, is being “furnished” and is not deemed “filed” by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor is it deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 8.01

Other Events.

On July 21, 2024, the Board of Directors of the Company declared a special distribution (the “Special Distribution”) for shares of its common stock in the amount of $0.20 per share of common stock. The Special Distribution is payable to stockholders of record as of August 5, 2024 and will be paid on or about August 15, 2024.

 

Item 9.01

Financial Statements and Exhibits.

(a) Financial Statements of Fund Acquired

The information required by Item 9.01(a) of Form 8-K, including the financial statements required pursuant to Rule 6-11 of Regulation S-X, was previously included or incorporated by reference in the Company’s Joint Proxy Statement/Prospectus, and, pursuant to General Instruction B.3 of Form 8-K, is not included herein.


(d) Exhibits

 

2.1    Agreement and Plan of Merger, dated as of November 7, 2023, among MidCap Financial Investment Corporation, Apollo Senior Floating Rate Fund Inc., AFT Merger Sub, Inc. and Apollo Investment Management, L.P. (for the limited purposes set forth therein) (incorporated by reference to Exhibit 2.1 filed with MidCap Financial Investment Corporation’s Current Report on Form 8-K (File No. 814-00646) on November 7, 2023).
2.2    Agreement and Plan of Merger, dated as of November 7, 2023, among MidCap Financial Investment Corporation, Apollo Tactical Income Fund Inc., AIF Merger Sub, Inc. and Apollo Investment Management, L.P. (for the limited purposes set forth therein) (incorporated by reference to Exhibit 2.2 filed with MidCap Financial Investment Corporation’s Current Report on Form 8-K (File No. 814-00646) on November 7, 2023).
99.1    Press Release of MidCap Financial Investment Corporation, dated July 22, 2024.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

MIDCAP FINANCIAL INVESTMENT CORPORATION
By:  

/s/ Kristin Hester

Name:   Kristin Hester
Title:   Chief Legal Officer and Secretary

Date: July 22, 2024

Exhibit 99.1

 

LOGO

MidCap Financial Investment Corporation Completes Mergers with

Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc.

MFIC Declares Special Distribution of $0.20 Per Share in Connection with Mergers

New York, NY — July 22, 2024 — MidCap Financial Investment Corporation (NASDAQ: MFIC) today announced that it has completed its previously announced mergers with Apollo Senior Floating Rate Fund Inc. (NYSE: AFT) and Apollo Tactical Income Fund Inc. (NYSE: AIF) (AFT and AIF, together, the “CEFs”). The combined company will operate as MidCap Financial Investment Corporation and will continue to trade on the Nasdaq Global Select Market under the ticker symbol “MFIC.”

In connection with the closing of the mergers, former AFT stockholders will receive 0.9547 shares of MFIC common stock for each share of AFT common stock they held prior to the closing based on the final exchange ratio, subject to adjustments for cash payable in lieu of fractional shares. In addition, former AIF stockholders will receive 0.9441 shares of MFIC common stock for each share of AIF common stock they held prior to the closing based on the final exchange ratio, subject to adjustments for cash payable in lieu of fractional shares.

The final exchange ratios were based on MFIC’s net asset value (“NAV”) per share of $15.43, AFT’s NAV per share of $14.73, and AIF’s NAV per share of $14.57, each calculated as of July 19, 2024. 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. MFIC’s NAV per share as of June 30, 2024 reflects net investment income of $0.45 per share for the June quarter and certain adjustments to the fair value of its investment portfolio. The change in MFIC’s NAV per share between June 30, 2024 and July 19, 2024 was primarily the result of the accrual of net income. The change in the CEFs’ NAVs per share between June 30, 2024 and July 19, 2024 was primarily the result of the accrual of net income and the pre-merger distributions that were declared and paid to their respective stockholders. As a result of 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. Each merger is expected to qualify as a tax-free reorganization for federal tax purposes.

Certain financial highlights for the combined company as of the closing of the mergers include:

 

Investments, at fair value:

   $ 3.07 billion  

Net assets:

   $ 1.45 billion 1 

Net leverage ratio:

     1.13x 1,2 

Common shares outstanding:

     93.8 million 1,3 

% of total investments on non-accrual status, at amortized cost / at fair value:

     2.3%/1.8% 4 

 

1 

Subject to adjustments for cash payable to former AFT and AIF stockholders in lieu of fractional shares.

2 

MFIC’s net leverage ratio is defined as debt outstanding plus payable for investments purchased, less receivable for investments sold, less cash and cash equivalents, less foreign currencies, divided by net assets.

3 

As of result of the mergers, MFIC issued approximately 28.5 million shares of common stock to former AFT and AIF stockholders.

4 

As of the closing of the mergers, 11 companies were on non-accrual status, including 6 companies acquired from the CEF’s portfolios.

 

1


Financial highlights presented above exclude any impact from purchase accounting adjustments.

In connection with the closing of the mergers, on July 21, 2024, 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.

In connection with the mergers, Lazard served as financial advisor and Proskauer Rose LLP as legal counsel to the special committee of MFIC. Keefe, Bruyette & Woods Inc., A Stifel Company, served as financial advisor and Dechert LLP as legal counsel to the special committees of the CEFs. Simpson Thacher & Bartlett LLP served as legal counsel to MFIC, AFT and AIF with respect to the mergers.

About MidCap Financial Investment Corporation

MidCap Financial Investment Corporation (NASDAQ: MFIC) 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 “1940 Act”). For tax purposes, MFIC has elected to be treated as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). MFIC is externally managed by Apollo Investment Management, L.P. (the “MFIC Adviser”), an affiliate of Apollo Global Management, Inc. and its consolidated subsidiaries (“Apollo”), a high-growth global alternative asset manager. MFIC’s investment objective is to generate current income and, to a lesser extent, long-term capital appreciation. MFIC primarily invests in directly originated and privately negotiated first lien senior secured loans to privately held U.S. middle-market companies, which MFIC generally defines as companies with less than $75 million in EBITDA, as may be adjusted for market disruptions, mergers and acquisitions-related charges and synergies, and other items. To a lesser extent, MFIC may invest in other types of securities including, first lien unitranche, second lien senior secured, unsecured, subordinated, and mezzanine loans, and equities in both private and public middle market companies. For more information, please visit www.midcapfinancialic.com.

 

2


Forward-Looking Statements

Some of the statements in this press release constitute forward-looking statements because they relate to future events, future performance or financial condition or the mergers of AFT and AIF with and into MFIC (the “Mergers”). The forward-looking statements may include statements as to: future operating results of MFIC as the combined company following the Mergers, and distribution projections; business prospects of MFIC as the combined company following the Mergers and the prospects of its portfolio companies; and the impact of the investments that MFIC as the combined company following the Mergers expects to make. In addition, words such as “anticipate,” “believe,” “expect,” “seek,” “plan,” “should,” “estimate,” “project” and “intend” indicate forward-looking statements, although not all forward-looking statements include these words. The forward-looking statements contained in this press release involve risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected, including those set forth in the “Special Note Regarding Forward-Looking Statements” section in our registration statement on Form N-14 (333-275640) previously filed with the Securities and Exchange Commission (the “SEC”). MFIC has based the forward-looking statements included in this press release on information available to it on the date hereof, and MFIC assumes no obligation to update any such forward-looking statements. Although MFIC undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that it may make directly to you or through reports that MFIC in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

Contact

Elizabeth Besen

Investor Relations Manager for MFIC

212.822.0625

ebesen@apollo.com

 

3

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Document and Entity Information
Jul. 22, 2024
Document And Entity Information [Line Items]  
Entity Registrant Name MidCap Financial Investment Corp
Entity Address, State or Province NY
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Entity Central Index Key 0001278752
Document Type 8-K
Document Period End Date Jul. 22, 2024
Entity Incorporation State Country Code MD
Entity File Number 814-00646
Entity Tax Identification Number 52-2439556
Entity Address, Address Line One 9 West 57th Street New York
Entity Address, City or Town New York
Entity Address, Postal Zip Code 10019
City Area Code (212)
Local Phone Number 515-3450
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Common Stock [Member]  
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Security 12b Title Common Stock, $0.001 par value
Trading Symbol MFIC
Security Exchange Name NASDAQ
Deferrable Notes [Member]  
Document And Entity Information [Line Items]  
Security 12b Title 8.00% Notes due 2028
Trading Symbol MFICL
Security Exchange Name NASDAQ

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