Apollo-led group to privatize Atlas Air for $3 billion

Marc Rowan, co-founder and then senior managing director of Apollo Global Management, attends a panel discussion Beverly Hills, California April 29, 2014. REUTERS/Kevork Djansezian/File Photo

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Aug 4 (Reuters) – Air cargo company Atlas Air Worldwide Holdings Inc (AAWW.O) is being taken private for nearly $3 billion by a group of investors led by private equity giant Apollo Global Management Inc (APO .NOT).

The deal announced Thursday offers $102.50 for each Atlas Air share, a 35% premium to the company’s closing price on Friday before media reported the deal.

Atlas Air offers air leasing services that can be used to transport perishables, heavy construction equipment or passengers. The company’s customers include Boeing Co (BA.N), FedEx Corp (FDX.N) and MotoGP, according to its website.

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Airlines’ outlook has improved this year on pent-up travel demand and the easing of COVID-19 restrictions, but the industry’s recovery faces risks from soaring fuel prices and the shortage of personnel in a tight labor market.

In second-quarter results released Thursday, Atlas Air’s profit fell 18% as higher spending on fuel and employee salaries pushed up expenses 26%.

Shares of the company rose slightly in premarket trading after rising nearly 28% this week amid speculation over the deal, which gives Atlas a $5.2 billion business and also includes subsidiaries of JF Lehman & Co and Hill City Capital.

Atlas said it expects the takeover to close in the fourth quarter of 2022 or the first quarter of 2023.

A decline in stock market valuations this year has presented private equity firms with an opportunity to buy companies on the cheap. These companies were the main driver of global deals in the first half of the year, although global mergers and acquisitions slowed due to hostile market conditions. Read more

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Reporting by Niket Nishant in Bengaluru; Editing by Aditya Soni

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