Firms & Funds

LyondellBasell: No. 1 lucrative deal in Apollo’s 23-year history

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  • Courting LPs, Apollo exec Spilker flags fat return from chemical firm
  • Firm ‘patient’ as it looks for new deal targets
  • Apollo sold remaining interest in LyondellBasell on Nov. 1

Marc Spilker, president of Apollo Global Management, told Wall Street analysts on the company’s quarterly conference call Nov. 7 that the firm realized a multiple on invested capital of more than 5x for LyondellBasell.

The Nov. 1 stock offering of 15 million shares priced at $74.10 each, and marked Apollo funds’ remaining interest in LyondellBasell, the firm said.

Spilker’s comment on LyondellBasell could have been aimed at potential limited partners, as the firm cleared $12 billion in commitments for Apollo Fund VIII during the quarter, but remains in the market for more fresh capital.

Apollo had disclosed a total of $473 million in capital at work from Fund VI and Fund VII for LyondellBasell and a $2.9 billion remaining value of the investments as of June 30.

Meanwhile, among capital deployed for its private equity business, activity remained “light” during the quarter, but “our transaction pipeline is steadily building as we seek to identify idiosyncratic opportunities aligned with our value-oriented investment approach,” Spilker said.

One example of this was a recently-completed corporate transaction with Pitney Bowes for the firm’s management services business, he said.

“In the current environment, where valuations are relatively high, we will remain disciplined and patient in deploying our funds [loan-dated] locked-up capital,” Spilker said. “We take a long-term view towards capital deployment, which is measured in years, rather than quarters, and we remain confident that we will identify ample opportunities for our funds to make attractive investments over time.”

Also during the third quarter, Apollo held IPOs for Sprouts Farmers Market Inc and Athlon Energy. It also floated stock offerings of Realogy Holdings, Evertec Inc, Berry Plastics Group, Norwegian Cruise Line Holdings Ltd and Countrywide Plc.

In March, 2010, LyondellBasell filed a restructuring plan that rejected a takeover bid from India’s Reliance Industries Ltd. The plan OK’d a commitment from Apollo Management LP to help the firm exit bankruptcy.