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LONDON and NEW YORK - Apollo Global Management Inc. (NYSE: APO), a $78.41 billion market cap investment giant currently trading at $137.44, has reached an agreement to purchase a majority interest in OEG Energy Group, a prominent player in offshore energy solutions, from Oaktree Capital Management, LP and other investors. According to InvestingPro analysis, Apollo appears undervalued at current levels, making this strategic acquisition particularly noteworthy. The deal values OEG at over $1 billion, with Oaktree retaining a minority stake in the company.
OEG, with a history spanning over five decades, has established itself as a significant service provider in the offshore energy sector, catering to both oil & gas and wind end markets. The company boasts a fleet of over 75,000 cargo carrying units (CCUs), which are essential for transporting cargo to and from offshore installations. Additionally, OEG’s renewables division is recognized for its comprehensive technical solutions and services within the offshore wind industry.
John Heiton, CEO of OEG, emphasized the company’s commitment to growth, especially as energy producers invest in the transition to renewable power. Heiton expressed enthusiasm about the new partnership with Apollo, which has demonstrated strong financial stability with a current ratio of 1.51 and has maintained dividend payments for 15 consecutive years, currently yielding 1.35%. InvestingPro subscribers can access 10+ additional key metrics and insights about Apollo’s financial health and growth potential. Heiton expressed confidence in the continued delivery of quality service to their customers.
Apollo Partner Wilson Handler highlighted OEG’s global leadership and integrated business model, noting the opportunity for growth amid increasing demand for efficient energy production and renewable power. Handler expressed Apollo’s intention to leverage its platform and energy expertise to enhance OEG’s value.
Francesco Giuliani of Oaktree’s Power Opportunities strategy remarked on the successful partnership with OEG’s management and the firm’s continued confidence in the company’s growth trajectory. Oaktree is pleased to maintain a minority interest alongside Apollo funds.
The transaction is expected to close in Q2 2025, pending regulatory approvals. Apollo’s recent energy investments reflect a broader commitment to climate and energy transition-related projects, with approximately $58 billion committed, deployed, or arranged as of December 31, 2024.
Banco Santander SA and Vinson & Elkins LLP advised the Apollo funds on the financial and legal aspects of the transaction, respectively. Oaktree was advised by Goldman Sachs International and legal counsel from Gibson, Dunn & Crutcher LLP and Latham & Watkins. OEG management received legal advice from White & Case LLP.
This news is based on a press release statement. Apollo, a global alternative asset manager with $751 billion in assets under management and $25.89 billion in revenue over the last twelve months, and OEG, a leader in offshore energy solutions, are poised for a strategic partnership that promises to shape the industry’s future. With analyst price targets ranging from $163 to $214, and a comprehensive analysis available in the InvestingPro Research Report, this partnership could mark a significant milestone in Apollo’s growth trajectory.
In other recent news, EmployBridge Holding Co. experienced a credit rating downgrade by S&P Global Ratings to ’SD’ from ’CC’. This downgrade follows the company’s completion of a distressed exchange transaction involving a new money term loan and a second-out exchange term loan, replacing existing loans. S&P Global Ratings views this transaction as a distressed exchange, as investors will receive less than originally promised, effectively amounting to a default. Additionally, the issue-level ratings for EmployBridge were lowered to ’D’. S&P Global Ratings plans to reassess EmployBridge’s credit rating soon, considering its capital structure and liquidity position.
Meanwhile, Apollo Global Management Inc. is reportedly in talks to lead a $35 billion financing package for Meta Platforms Inc.’s U.S. data centers. The discussions are still preliminary, and it’s uncertain if a deal will be finalized. Furthermore, Apollo Global Management announced executive changes, with Louis-Jacques Tanguy stepping down as Chief Accounting Officer in March 2025, and Martin Kelly temporarily assuming his responsibilities. Piper Sandler has maintained its Overweight rating on Apollo Global, citing the firm’s strategic positioning and potential for earnings growth. Additionally, Apollo Global is among the shortlisted bidders for Reckitt Benckiser Group Plc’s homecare brands, which are expected to sell for between £4 billion and £5 billion.
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