Apollo Funds Lead $1.75 Billion Structured Equity Investment in Albertsons Companies

Rhea-AI Summary

Apollo Global Management has announced a significant investment of $1.75 billion in convertible preferred stock of Albertsons Companies, equating to approximately 17.5% equity ownership. This transaction, led by Apollo’s Hybrid Value business, is anticipated to close by June 15, 2020, pending customary conditions. This move reflects Apollo's confidence in Albertsons' resilient business model and strategic growth plans. Since the beginning of 2020, Apollo has invested over $50 billion across various sectors, including more than $1 billion in recent transactions with notable companies.

Positive

• Investment of $1.75 billion in Albertsons enhances Apollo's equity position by approximately 17.5%.
• Demonstrates Apollo's confidence in Albertsons' robust business and growth strategy.
• Part of a broader strategy showcasing Apollo's capability in providing tailored capital solutions.

Negative

• None.

NEW YORK, May 20, 2020 (GLOBE NEWSWIRE) -- Apollo Global Management, Inc. (NYSE: APO) (together with its consolidated subsidiaries, “Apollo” or the “Firm”) today announced that certain funds managed by its affiliates have led the purchase of $1.75 billion of convertible preferred stock (“preferred stock”) in Albertsons Companies, one of the largest food and drug retailers in the United States. The investment will represent approximately 17.5% pro forma equity ownership of Albertsons on an as-converted basis. The transaction is expected to close by June 15, 2020 and is subject to customary closing conditions.

The transaction was led by Apollo’s Hybrid Value business in partnership with the Credit platform and drew upon Apollo’s depth of experience in the sector.  As the lead investor, Apollo-managed funds are purchasing the preferred stock based on the Firm’s view of Albertsons’ resilient business model, strategy to invest in compelling growth opportunities and proven management team. It is the third sizable investment made by Hybrid Value in the past month, demonstrating Apollo’s conviction in defensible, quality companies and an ability to act as capital solutions provider throughout various cycles.

Apollo Co-Presidents Scott Kleinman and Jim Zelter commented, “We believe the Albertsons investment showcases the benefits of Apollo’s integrated platform and our ability to leverage capital and knowledge across the Firm. With expertise in the grocery sector, flexible strategies and an integrated operating model, the Hybrid Value and Credit teams were able to jointly lead one of the largest private preferred investments made in recent years.”

Since the start of the year, Apollo has deployed more than $50 billion in capital. In the past four weeks, Apollo’s Hybrid Value business, which seeks to provide creative equity and debt capital solutions, has invested or committed more than $1 billion in transactions with Expedia, Cimpress and now Albertsons.

Matt Michelini and Rob Ruberton, Senior Partners and Co-Heads of Hybrid Value, said, “Apollo created the Hybrid Value business to provide capital solutions tailored to a company’s specific needs.  Businesses are finding these capabilities highly relevant in today’s volatile economic and market environment.  We are pleased to have invested significant capital over the last month, working with strong management teams, boards, sponsors, founders and public companies, with the latest being Albertsons, one of the premier grocers in the US.”  

Apollo’s Hybrid Value business is a natural extension of its integrated global platform that operates without barriers among its Private Equity, Credit and Real Assets teams. Apollo believes this integrated approach and knowledge sharing can lead to better investment outcomes.  

About Apollo

Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, San Diego, Houston, Bethesda, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Hong Kong, Shanghai and Tokyo. Apollo had assets under management of approximately $316 billion as of March 31, 2020 in credit, private equity and real assets funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.apollo.com.

Contact Information

For investors please contact:

Gary M. Stein
Head of Investor Relations
Apollo Global Management, Inc.
(212) 822-0467
gstein@apollo.com  

Ann Dai
Investor Relations Manager
Apollo Global Management, Inc.
(212) 822-0678
adai@apollo.com

For media inquiries please contact:

Joanna Rose
Global Head of Corporate Communications
Apollo Global Management, Inc.
(212) 822-0491
jrose@apollo.com

FAQ

What is the significance of the $1.75 billion investment in Albertsons by Apollo (NYSE: APO)?

The investment represents approximately 17.5% equity ownership in Albertsons, showcasing Apollo's confidence in the company’s growth strategy.

When is the Apollo investment in Albertsons expected to close?

The transaction is expected to close by June 15, 2020, subject to customary closing conditions.

How much capital has Apollo deployed since the start of 2020?

Apollo has deployed over $50 billion in capital across various investments since the beginning of 2020.

Which business sector is Apollo's Hybrid Value focused on with this investment?

Apollo's Hybrid Value focuses on providing capital solutions in the grocery sector, exemplified by the investment in Albertsons.