Apollo to Fund $2B PowerGrid Acquisition with $1B Private Debt
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The debt package includes a $650 million term loan, a $200 million delayed-draw term loan, and a $125 million revolving line of credit. The larger term loan will mature in 7 years and will be issued at a discount of 99 cents on the dollar, where PowerGrid will pay an interest rate of 4.75 percentage points over the US benchmark. This interest rate has the potential to decrease by 0.25 percentage points over time.
This transaction highlights the growing trend of private credit firms increasing their involvement in financing private equity acquisitions, particularly as M&A activity has seen a slowdown in the broader market. Apollo Global Management Inc. (NYSE:APO) is a private equity firm that specializes in investments in credit, private equity, infrastructure, secondaries, and real estate markets. Apollo announced the acquisition of a majority stake in PowerGrid Services earlier on May 13. PowerGrid Services is a US provider of electric utility maintenance and construction.
While we acknowledge the potential of APO to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than APO and that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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