HOUSTON - Apollo Global Management Inc. (NYSE: NYSE:APO) has acquired a majority stake in Freedom CNG, a Texas-based operator of compressed natural gas (CNG) and renewable natural gas (RNG) fueling stations, as announced today. This investment by Apollo-managed funds underscores the firm's commitment to supporting the energy transition through strategic acquisitions.
Founded in 2012, Freedom has established a network of fueling stations in the Houston Metropolitan area, catering to a range of customers including logistics and transport companies, municipalities, and school districts. These stations are positioned to meet the increasing demand for low carbon alternative fuels and support decarbonization efforts.
Apollo Partner Scott Browning highlighted Freedom's strong portfolio and growth potential, emphasizing the company's established customer base and development opportunities. Browning expressed Apollo's intention to drive expansion through both organic growth and strategic acquisitions.
Freedom's Managing Partners, Bill Winters and Ronny Cuenod, welcomed the partnership with Apollo, noting the additional resources and experience Apollo brings to the table. They are keen to scale up operations to meet the growing demand for RNG, which is seen as an economically viable and environmentally friendly fuel option.
The transportation sector, which accounts for over a quarter of U.S. energy consumption, is in a transitional phase, seeking sustainable energy solutions. RNG, derived from landfills and other sources, offers a significant reduction in emissions without compromising operational efficiency.
Apollo's investment in Freedom aligns with its broader strategy of deploying capital in energy transition and sustainability-related investments. Over the past five years, Apollo-managed funds have invested approximately $40 billion in various clean energy initiatives, including renewable fuels and technologies that facilitate decarbonization.
Financial advisory services for the transaction were provided by Raymond James & Associates, Inc., while Crady Jewett McCulley & Houren L.L.P. and Baker Botts L.L.P. served as legal counsel to Freedom. Vinson & Elkins LLP acted as legal counsel to the Apollo Funds.
The acquisition is part of Apollo's broader asset management strategy, which focuses on yield, hybrid, and equity investing strategies. As of June 30, 2024, Apollo managed approximately $696 billion in assets. This transaction is expected to further enhance Apollo's portfolio in the energy sector and contribute to the overall growth of RNG as a key component in the energy transition.
This report is based on a press release statement.
In other recent news, Apollo Global Management has been the subject of several noteworthy developments. The company's upcoming investor day is expected to provide a comprehensive review of Apollo's asset management platform and insights into its Athene business, according to Citi, which maintains a Buy rating on Apollo stock. Apollo has also made strategic moves to strengthen its non-U.S. origination platform, including a partial sell-down of its stake in the Australian company, Challenger, and the acquisition of Beequip, a firm located in the Netherlands.
In addition to these moves, Apollo was involved in a $900 million refinancing deal with Gannett Co., Inc., aimed at extending debt maturities and reducing the dilutive effect of convertible notes. Analysts from firms such as TD Cowen, Redburn-Atlantic, Argus, and BofA Securities have provided varying perspectives on Apollo's stock, with most maintaining a positive outlook on the company's long-term value proposition. These are the recent developments for Apollo Global Management.
InvestingPro Insights
As Apollo Global Management Inc. (NYSE: APO) takes a significant step in the energy sector with its acquisition of Freedom CNG, real-time data and insights from InvestingPro provide a deeper understanding of the firm's financial health and market performance. Notably, Apollo's market capitalization stands at $63.88 billion, reflecting its substantial presence in the financial services industry. The company's Price/Earnings (P/E) ratio, a measure of its current share price relative to its per-share earnings, is 11.96, with an adjusted P/E ratio for the last twelve months as of Q2 2024 at 12.46. This valuation metric indicates Apollo's earnings relative to its share price are lower than some of its industry peers, potentially suggesting a value opportunity for investors.
Apollo's commitment to dividends is shown by its track record of maintaining dividend payments for 14 consecutive years, with a dividend yield as of late 2024 at 1.7%. The company's revenue for the last twelve months as of Q2 2024 is reported at $25.96 billion, though it has experienced a revenue decline of 2.78% during the same period. Despite this, Apollo is expected to remain profitable this year, as highlighted by one of the InvestingPro Tips, which is of particular interest to investors looking for stable returns.
InvestingPro Tips also point out Apollo's status as a prominent player in the Financial Services industry and its stock price volatility. For investors considering Apollo's stock, it's worth noting that the company trades at a high Price/Book multiple of 4.61, which could imply that the stock is priced more expensively compared to its book value than some competitors. However, this could also reflect the market's expectations for future growth or Apollo's ability to generate higher returns on its assets.
For more detailed analysis and additional InvestingPro Tips, which can further guide investment decisions regarding Apollo Global Management, investors can visit https://www.investing.com/pro/APO. There are currently 9 additional InvestingPro Tips available that delve deeper into Apollo's financial and market performance.
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