The money that
In August, the Purchase, N.Y.-based firm founded by Leon Black floated a $900 million stake in its management company—representing an undisclosed percentage of the general partnership—in a 144A equity offering on a private exchange operated by Goldman Sachs Group. By this spring, the buyout firm must move ahead with plans to shift its shares off the Goldman Sachs market and onto “a normal exchange,” most likely the NYSE, our source said. Shortly before the listing on the Goldman Sachs exchange, Apollo sold a little less than 10 percent of itself to the
Just as Blackstone last month used cash and stock from its June 2007 IPO to make its $930 million offer for
A real estate play makes particular sense for Apollo since the firm already has expertise in the field. It owns a number of REITs as well as real estate-focused portfolio companies in the retail and leisure industries, our source said. In the last year, the firm’s forays into real estate included the $8.4 billion buyout of Realogy, a New Jersey-based owner of Coldwell Banker and Century 21 real estate agencies, and the $28 billion purchase, along with
In addition to branching into new areas, expect to see Apollo return to its distressed investing roots in the coming months, as traditional LBO opportunities dry up. During its 17-year history, about 75 percent of Apollo’s deals have been conventional LBOs, our source said. The remaining 25 percent of deals relied on what our source called “de-leveraging,” or distressed-for-control investing in which Apollo buys bonds of distressed companies cheaply and swaps them for equity at some point during a restructuring process. That style of deal-making pops up periodically for the firm as market conditions warrant, and 2008 should produce “a big opportunity” in this arena, our source said.
Apollo’s organization along industry verticals aids in this flexibility, our source added.