Ares Fund to Acquire First Capital ABL Portfolio
Ares Management signed a definitive agreement to acquire the asset-based lending portfolio of First Capital Holdings, a portfolio company of H.I.G Capital. The transaction is expected to close during the second quarter, subject to customary closing conditions. The fund intends to fund the acquisition with a combination of debt and equity.
With this transaction, the Ares Commercial Finance platform, which is part of the firm’s direct lending group, will have approximately $700 million of loan commitments. The Ares Commercial Finance team, which operates across seven office locations throughout the U.S., will be expanded with members of the First Capital investment team.
“We are pleased to acquire this high-quality portfolio, and we welcome the team from First Capital,” said Jack Reilly, a partner in the Ares direct lending group. “We are excited to have the expertise of the First Capital team, which we believe will be highly complementary to ours and will help us achieve further success and scale in our commercial finance business.”
“Today’s announcement is another important milestone in the continued growth of the commercial finance platform within the Ares direct lending group,” added Mitch Goldstein, senior partner in the Ares direct lending group. “We have a long held view that commercial finance is an important and growing sector that requires a broad and strong direct lending platform like ours in order to originate, underwrite and service loans.”
“Investors continue to benefit from Ares’ ability to provide a broad array of credit strategies, especially in sectors where banks are increasingly either unable or unwilling to provide sufficient capital to companies or sponsors to meet the demand,” said Michael Arougheti, president of Ares Management. “We expect to continue to expand our commercial finance platform in order to meet the evolving needs of our investors for attractive and differentiated investment alternatives.”
First Capital provides customized and timely working capital financing solutions primarily to small and middle-market companies engaged mainly in manufacturing, distributing and business services with annual sales greater than $1 million.