Apollo-Led Group Will Take Atlas Air Private For $3 Billion

Marc Rowan, Co-Founder and Senior Managing Director, Apollo Global Management, LLC, takes part in a panel discussion of Credit Markets in Beverly Hills, Calif., on April 29, 2014. (Kevork Djansezian/Reuters)

The private investment group Apollo Global Management Inc ..

is taking Atlas Air Worldwide Holdings Inc. private for almost $3 billion.

The agreement announced on Thursday offers $102. 50 for each share of Atlas Air, a premium of 35 percent to the company’s closing price on Friday before media reports on the deal.

Atlas Air provides air leasing services. These can be used to ship perishables or heavy equipment, as well as passengers. According to the company’s website, its customers include FedEx Corp., MotoGP and Boeing Co.

Prospects of airlines have improved this year thanks to pent-up demand for travel and the easing of COVID-19 curbs, but the industry’s recovery faces risks from surging fuel prices and staff shortages in a tight labor market.

In second-quarter results reported on Thursday, Atlas Air’s profit fell 18 percent as higher spending on fuel and employee wages drove up expenses by 26 percent.

The company’s shares were slightly higher in premarket trading after rising nearly 28 percent this week amid speculation on the deal, which gives Atlas an enterprise of $5.2 billion and also includes affiliates of J.F. Lehman & Co., Hill City Capital.

Atlas stated that it expected the purchaseout to close during the fourth quarter 2022, or the first quarter 2023..

Private equity firms have had the opportunity to purchase companies at a bargain price this year due to a drop in stock values. These firms were the main driver of global dealmaking during the first half, even though overall M&A slowing due to adverse market conditions.

By Niket Nishant