According to a confirmation announcement made on Monday, New York based investment management firm Ares Capital will be buying Allied Capital, a company which has been an important part of Washington's finance industry for over 50 years. Under the new arrangement, 65% of the combined company will be owned by stockholders of Ares, while the remaining 35% will be with Allied Capital's stockholders.

The decision has come amidst large losses which Washington's business development firm was incurring as a result of the economic downturn. As Monday rolled in, Allied had dropped as much as 60% in the current year. Allied's auditors were also raising concerns and were quoted as saying that they had "doubt about the company's ability to continue as a going concern".

Talking about the takeover, President of Ares Capital Michael Arougheti said, "This transformative transaction creates a middle-market capital provider with leading market coverage, access to capital, scale and diversification".

While the deal is subject to approval by both Allied and Ares shareholders, regulators and lenders, it is, both companies confirmed, as good as done and will see a final closure real soon.