Apollo Global Management LLC (APO:US) stands to make a fivefold return on its investment in payment processor Evertec Inc., adding to successful deals as it seeks to raise $12 billion for a new leveraged-buyout fund.
Evertec, the Rio Piedras, Puerto Rico-based company offering transaction-processing services in Latin America and the Caribbean, plans to sell shares to public investors as soon as April 11, according to data compiled by Bloomberg. Apollo would reap $140 million from selling 7.38 million shares at $19 apiece, the midpoint of the initial public offering’s proposed range, and retain a stake valued at $558 million. The firm, which has also taken $160 million in dividends from Evertec, invested $184 million, the company’s regulatory filings show.
As the stock market rallies, IPOs are helping billionaire Leon Black’s private-equity firm pay down debt at portfolio companies as well as prepare to exit investments and return capital to clients. Those steps may make it easier to persuade investors to commit money to its eighth main fund.
Charles Zehren, a spokesman for New York-based Apollo at Rubenstein Associates Inc., declined to comment.
Private-equity firms lock up investor money for about a decade with a mandate to buy companies, improve their value and sell them with a profit before returning capital to clients. Apollo, founded in 1990, increased its assets under management 51 percent last year to $113 billion as of Dec. 31 as rising equity markets helped boost holdings.
Apollo returned $6.5 billion to investors last year. In the past 13 months it has sold a stake in chemical maker LyondellBasell Industries NV (LYB:US) at a profit and held IPOs for companies including Realogy Holdings Corp. (RLGY:US), a provider of real estate services; cruise-ship operator Norwegian Cruise Line Holdings Ltd; Rexnord Corp. (RXN:US), an industrial-components maker; and Berry Plastics Group Inc. (BERY:US), a packaging company.
Last month, Apollo was among investors who sold a 27 percent stake in cable-television company Charter Communications Inc. to John Malone’s Liberty Media Corp. for $2.62 billion. Another Apollo holding, retailer Smart & Final Inc., agreed in October to be sold to Ares Management LLC.
The firm’s current private-equity pool, Fund VII, was generating a net 26 percent internal rate of return as of Dec. 31, after taking advantage of distressed opportunities that arose from the 2008 global financial crisis. Its $10.1 billion Fund VI, which invested during the 2006 to 2008 boom in buyout transactions, had an 9 percent return rate.
Apollo acquired a 51 percent interest in Evertec from Popular Inc., the largest financial institution in the Caribbean, in 2010, according an IPO filing with the U.S. Securities and Exchange Commission.
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