Apollo-Led Group to Buy Atlas Air

Air-freight company Atlas Air Worldwide Holdings Inc (NASDAQ: AAWW) said on Thursday it had agreed to be bought by an investor group led by private equity giant Apollo Global Management (NYSE:APO) in a deal valued at $3.2 billion.

The offer of $102.50 per share represents a 35% premium to Atlas Air’s closing price on Friday, before media reports on the deal.

Atlas Air offers air leasing services that customers can use to ship perishables, heavy construction equipment or passengers. The Purchase, New York-based company counts Boeing Co (NYSE:BA), FedEx Corp (NYSE:FDX) and MotoGP among its customers, according to its website.

Airlines’ fortunes have improved as pent-up demand for travel prompts customers to step out of the pandemic bubble, but the industry has been battling inflation pressures and staff shortages in a tight labor market.

This year’s rout in equities and a drop in stock valuations has offered private equity firms an opportunity to buy companies on the cheap. Such firms were the chief driver of global deal-making in the first half of the year, even as mergers and acquisitions slowed due to hostile market conditions.

The deal is expected to close in the fourth quarter of 2022 or the first quarter 2023, Atlas said.

AAWW shares gained $2.85, or 2.9%, to $99.62, while those for APO dwindled $1.49, or 2.6%, to $55.74.