Apollo investor group buys Atlas Air Worldwide for $2.9B

Following unanimous approval from its Board, Atlas Air Worldwide (AAWW) sold today at an enterprise value of $5.2 billion to an Apollo-led investor group that includes J.F. Lehman & Company and Hill City Capital. The acquisition is around $2.9 billion. AAWW shareholders will receive $102.50 per share in cash, a 57% premium to the 30-day volume-weighted average trade price per share as of July 29, according to today’s release from the company. AAWW stocks jumped following the rumored deal on Monday, growing 28.93% between Monday and market close Wednesday. The transaction, subject to customary closing conditions, should close during Q4 2022 or Q1 2023, according to the release. [caption id="attachment_87815" align="alignright" width="408"] Photo courtesy of Atlas Air Worldwide Holdings[/caption] Atlas Air will continue to operate under its own name and remain under the leadership of its current executive board and President and Chief Executive John Dietrich, according to the release. “Following the closing of the sale to the Consortium, we will seek to leverage their resources, relationships and industry expertise to build on our strong financial and operational performance,” Dietrich said. “Their investment in our company demonstrates their confidence in our people and our culture as we serve the growing needs of the global supply chain.” Read more about the deal Atlas Air declined Air Cargo World's inquiry for comment. AAWW Q2 results AAWW also announced its Q2 results today, a day earlier than expected, with a reported net income of $88.3 million for the quarter, or $2.65 per diluted share, a 20% year-over-year drop. Revenue reached $1.2 billion, up 21% YoY while volumes totaled 83,922 block hours, down roughly 10% YoY. “We delivered second-quarter results in line with our expectations,” Dietrich said in today’s release from AAWW. “Through the first half of the year, global airfreight volumes exceeded pre-pandemic levels, while capacity remains constrained, particularly on key long-haul cargo trade lanes.” For the first half of 2022, AAWW’s net income reached $169.8 million, down 13% compared with the same period in 2021, according to the release. The company saw high operating costs, which it attributed to high fuel prices and decreased block hours as it provides less profitable CMI services and flew fewer passenger flights. Atlas flew an average of 10.2 cargo block hours per day in Q2, a 5.5% drop from Q1. Atlas also felt the impact of COVID-19 cases among staff, which reduced its profitability, according to the earnings report. AAWW canceled its earnings call and did not provide financial guidance for Q3 or 2023. The Atlas fleet In Q2 the company announced the purchase of four 777-200LRFs, one of which is expected to be delivered in late Q4 with the remaining three throughout 2023, according to the release. The company also purchased five of its existing 747-400Fs in Q2 . One was acquired in March and another in May, and the company anticipates completion of the three remaining aircraft purchases between August and December 2022. “Acquiring these widebody freighters underscores our confidence in the demand for international airfreight capacity, particularly in express, e-commerce and fast-growing global markets, and will drive strong returns for Atlas in the years ahead,” according to the earnings report. Atlas Air ranked No. 4 in Air Cargo World’s Freight 50 ranking of the world’s top cargo carriers, based on 2020 tonnage. Shares of Atlas Air Worldwide [ Nasdaq: AAWW ] were trading at $99.67 at press time, down 0.08% from market open. The lender has a market capitalization of $2.73 billion.

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