Atlas Air Worldwide (Nasdaq: AAWW) (“Atlas” or the “Company”), a
leading global provider of outsourced aircraft and aviation
operating services, today announced that it has entered into a
definitive agreement to be acquired by an investor group (“the
Consortium”) led by funds managed by affiliates of Apollo (NYSE:
APO) together with investment affiliates of J.F. Lehman &
Company and Hill City Capital in an all-cash transaction with an
enterprise valuation of approximately $5.2 billion.
Under the terms of the agreement, Atlas Air
Worldwide shareholders will receive $102.50 per share in cash,
representing a 57% premium to the 30-day volume-weighted average
trading price per share of Atlas Air Worldwide common stock as of
July 29, 20221. Upon completion of the transaction, Atlas Air
Worldwide will become a privately held company and shares of Atlas
Air Worldwide common stock will no longer be listed on the Nasdaq
stock exchange. Atlas Air Worldwide will continue operating under
the Atlas Air Worldwide name, be led by John Dietrich and the
current executive team and maintain its global presence.
“We believe this transaction will deliver
immediate and certain value to Atlas Air Worldwide shareholders at
a substantial premium, and we are pleased to reach this agreement
with the Consortium,” said Duncan McNabb, Chairman of the Atlas Air
Worldwide Board of Directors. “The Board's decision to unanimously
approve this transaction follows a careful evaluation and
thoughtful review of value creation opportunities for shareholders.
We believe this transaction is the right next step to maximize
value for our shareholders and the best path forward to accelerate
the Company’s ability to execute its strategic plan and achieve its
long-term growth objectives.”
“Over our 30-year history, Atlas Air Worldwide
has grown to become a global leader in airfreight, delivering
high-quality services to our diverse roster of customers around the
world,” said John Dietrich, President and Chief Executive Officer
of Atlas Air Worldwide. “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. 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.”
“Atlas Air Worldwide is a market leader that
continues to set higher standards for excellence within the
airfreight industry,” said Apollo Partners Antoine Munfakh and
Jason Scheir and J.F. Lehman & Company Partner Alex Harman on
behalf of the Consortium. “With the strong market demand and
long-term secular tailwinds for global air cargo services, Atlas is
poised to capitalize on many opportunities for continued growth as
a fund portfolio company of Apollo, J.F. Lehman and Hill City. We
look forward to leveraging our resources, capital and experience in
the sector to support the talented Atlas team, alongside our
partners in this exciting next phase.”
1July 29, 2022 represents the last full trading
day prior to market speculation regarding a potential sale of the
Company.
Approvals and Timing
The transaction is expected to close in the
fourth quarter 2022 or first quarter 2023, subject to customary
closing conditions, including approval by Atlas Air Worldwide
shareholders and receipt of regulatory approvals.
Atlas Air Worldwide Second Quarter 2022
Results
In a separate press release, Atlas Air Worldwide
today announced its financial results for the second quarter ended
June 30, 2022, which is accessible by visiting the Investor
Relations section of the Company’s corporate website at
www.atlasairworldwide.com. In light of the announced transaction,
Atlas has cancelled the earnings conference call previously
scheduled on Friday, August 5, 2022.
Advisors
Morgan Stanley & Co. LLC is serving as
exclusive financial advisor to Atlas Air Worldwide. Cravath, Swaine
& Moore LLP is serving as Atlas Air Worldwide’s legal
advisor.
Evercore is acting as lead financial advisor to
the Consortium. Barclays, Goldman Sachs, and Mizuho Bank are
serving as financial advisors to the Consortium, and Paul, Weiss,
Rifkind, Wharton & Garrison LLP is serving as legal advisor to
Apollo and the Consortium entity, and Jones Day is providing legal
advice to J.F. Lehman & Company and Hill City Capital.
Financing
Committed financing in support of the
transaction was provided by Goldman Sachs, Barclays, Apollo Capital
Management, Mizuho, and Credit Agricole.
About Atlas Air Worldwide
Atlas Air Worldwide is a leading global provider
of outsourced aircraft and aviation operating services. It is the
parent company of Atlas Air, Inc. and Titan Aviation Holdings,
Inc., and is the majority shareholder of Polar Air Cargo Worldwide,
Inc. Our companies operate the world’s largest fleet of 747
freighter aircraft and provide customers the broadest array of
Boeing 747, 777, 767 and 737 aircraft for domestic, regional and
international cargo and passenger operations.
Atlas Air Worldwide’s press releases, SEC
filings and other information may be accessed through the company’s
home page, www.atlasairworldwide.com.
About Apollo
Apollo is a global, high-growth alternative
asset manager. In the asset management business, Apollo seeks to
provide its clients excess return at every point along the
risk-reward spectrum from investment grade to private equity with a
focus on three business strategies: yield, hybrid, and equity. For
more than three decades, Apollo’s investing expertise across its
fully integrated platform has served the financial return needs of
its clients and provided businesses with innovative capital
solutions for growth. Through Athene, Apollo’s retirement services
business, it specializes in helping clients achieve financial
security by providing a suite of retirement savings products and
acting as a solutions provider to institutions. Apollo’s patient,
creative, and knowledgeable approach to investing aligns its
clients, businesses it invests in, its team members, and the
communities it impacts, to expand opportunity and achieve positive
outcomes. As of March 31, 2022, Apollo had approximately $513
billion of assets under management. To learn more, please visit
www.apollo.com.
About J.F. Lehman &
Company
J.F. Lehman & Company is a private equity
investment firm focused on the aerospace, defense, maritime and
environmental sectors. This investment strategy reflects the firm’s
deep experience in and commitment to these sectors since the firm’s
founding three decades ago. Headquartered in New York, NY, the firm
currently has approximately $3 billion of assets under management.
To learn more, please visit www.jflpartners.com.
About Hill City Capital
Hill City Capital is an investment firm led by
Chief Investment Officer Chip Frazier. With investment research
focused primarily in Industrial, Aerospace and Transportation, Hill
City’s investment strategy is characterized by a long-duration
investment horizon, a rigorous fundamental investment process and
active engagement with management. Hill City Capital was founded in
2019, with its principal place of business is Boston, MA.
Forward-Looking Statements
This release contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 that reflect Atlas Air Worldwide’s current views
with respect to certain current and future events and financial
performance. Those statements are based on management’s beliefs,
plans, expectations and assumptions, and on information currently
available to management. Generally, the words “will,” “may,”
“should,” “could,” “would,” “expect,” “anticipate,” “intend,”
“plan,” “continue,” “believe,” “seek,” “project,” “estimate,” and
similar expressions used in this release that do not relate to
historical facts are intended to identify forward-looking
statements.
Such forward-looking statements speak only as of
the date of this release. They are and will be, as the case may be,
subject to many risks, uncertainties and factors relating to the
operations and business environments of Atlas Air Worldwide and its
subsidiaries (collectively, the “companies”) that may cause the
actual results of the companies to be materially different from any
future results, express or implied, in such forward-looking
statements.
Factors that could cause actual results to
differ materially from these forward-looking statements include,
but are not limited to, the following: our ability to effectively
operate the network service contemplated by our agreements with
Amazon; the possibility that Amazon may terminate its agreements
with the companies; the ability of the companies to operate
pursuant to the terms of their financing facilities; the ability of
the companies to obtain and maintain normal terms with vendors and
service providers; the companies’ ability to maintain contracts
that are critical to their operations; the ability of the companies
to fund and execute their business plan; the ability of the
companies to attract, motivate and/or retain key executives, pilots
and associates; the ability of the companies to attract and retain
customers; the continued availability of our wide-body aircraft;
demand for cargo services in the markets in which the companies
operate; changes in U.S. and non-U.S. government trade and tax
policies; economic conditions; the impact of geographical events or
health epidemics such as the COVID-19 pandemic; the impact of
COVID-19 vaccine mandates; our compliance with the requirements and
restrictions under the Payroll Support Program; the effects of any
hostilities or act of war or any terrorist attack; significant data
breach or disruption of our information technology systems; labor
costs and relations, work stoppages and service slowdowns;
financing costs; the cost and availability of war risk insurance;
aviation fuel costs; security-related costs; competitive pressures
on pricing (especially from lower-cost competitors); volatility in
the international currency markets; geopolitical events; weather
conditions; natural disasters; government legislation and
regulation; border restrictions; consumer perceptions of the
companies’ products and services; anticipated and future
litigation; the risk that the proposed transaction may not be
completed in a timely manner or at all; the failure to receive, on
a timely basis or otherwise, the required approvals of the proposed
transaction by Atlas Air Worldwide’s stockholders; the possibility
that any or all of the various conditions to the consummation of
the proposed transaction may not be satisfied or waived, including
the failure to receive any required regulatory approvals from any
applicable governmental entities (or any conditions, limitations or
restrictions placed on such approvals); the possibility that
competing offers or acquisition proposals for Atlas Air Worldwide
will be made; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
definitive transaction agreement relating to the proposed
transaction, including in circumstances which would require Atlas
Air Worldwide to pay a termination fee; the effect of the
announcement or pendency of the proposed transaction on Atlas Air
Worldwide’s ability to attract, motivate or retain key executives,
pilots and associates, its ability to maintain relationships with
its customers, including Amazon.com, Inc., vendors, service
providers and others with whom it does business, or its operating
results and business generally; risks related to the proposed
transaction diverting management’s attention from Atlas Air
Worldwide’s ongoing business operations; the risk of shareholder
litigation in connection with the proposed transaction, including
resulting expense or delay; and (i) any other risks discussed in
Atlas Air Worldwide’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2021 (the “Annual Report”) and Atlas Air
Worldwide’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2022 filed by Atlas Air Worldwide with the Securities and
Exchange Commission (the “SEC”), and, in particular, the risk
factors set forth under the headings “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in the Annual Report and the Quarterly
Report and (ii) other risk factors identified from time to time in
other filings with the SEC. Filings with the SEC are available on
the SEC’s website at http://www.sec.gov.
Except as stated in this release, Atlas Air
Worldwide is not providing guidance or estimates regarding its
anticipated business and financial performance for 2022 or
thereafter.
Atlas Air Worldwide assumes no obligation to
update such statements contained in this release to reflect actual
results, changes in assumptions or changes in other factors
affecting such estimates other than as required by law and
expressly disclaims any obligation to revise or update publicly any
forward-looking statement to reflect future events or
circumstances.
Participants in the Solicitation
Atlas Air Worldwide and its directors, executive
officers and other members of management and employees, under SEC
rules, may be deemed to be “participants” in the solicitation of
proxies from stockholders of Atlas Air Worldwide in favor of the
proposed transaction. Information about Atlas Air Worldwide’s
directors and executive officers is set forth in Atlas Air
Worldwide’s Proxy Statement on Schedule 14A for its 2022 Annual
Meeting of Shareholders, which was filed with the SEC on April 15,
2022. To the extent holdings of Atlas Air Worldwide’s securities by
its directors or executive officers have changed since the amounts
set forth in such 2022 proxy statement, such changes have been or
will be reflected on Initial Statements of Beneficial Ownership on
Form 3 or Statements of Change in Ownership on Form 4 filed with
the SEC. Additional information concerning the interests of Atlas
Air Worldwide’s participants in the solicitation, which may, in
some cases, be different than those of Atlas Air Worldwide’s
stockholders generally, will be set forth in Atlas Air Worldwide’s
proxy statement relating to the proposed transaction when it
becomes available.
Additional Information and Where to Find It
This release may be deemed to be solicitation
material in respect of the proposed acquisition of Atlas Air
Worldwide by Rand Parent, LLC. In connection with the proposed
transaction, Atlas Air Worldwide intends to file relevant materials
with the SEC, including Atlas Air Worldwide’s proxy statement in
preliminary and definitive form. INVESTORS AND STOCKHOLDERS OF
ATLAS AIR WORLDWIDE ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED
WITH THE SEC, INCLUDING ATLAS AIR WORLDWIDE’S PROXY STATEMENT (IF
AND WHEN AVAILABLE), BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security
holders are or will be able to obtain the documents (if and when
available) free of charge at the SEC’s website at www.sec.gov, or
free of charge from Atlas Air Worldwide by directing a request to
Atlas Air Worldwide Investor Relations, 2000 Westchester Avenue,
Purchase, NY or at tel: +1 914 701 8200 or email:
InvestorRelations@atlasair.com.
No Offer or Solicitation
This release is not intended to and shall not
constitute an offer to buy or sell or the solicitation of an offer
to buy or sell any securities, or a solicitation of any vote or
approval, nor shall there be any offer, solicitation or sale of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction. No offer of
securities shall be made in the United States absent registration
under the U.S. Securities Act of 1933, as amended, or pursuant to
an exemption from, or in a transaction not subject to, such
registration requirements.
Contacts
Atlas Air Worldwide
Eric CamadecoDirector, Investor
RelationsInvestorRelations@atlasair.com
Dan ScorpioAbernathy MacGregor for Atlas Air Worldwide(646)
899-8118dps@abmac.com
Apollo on behalf of the Consortium
For investor inquiries regarding Apollo, please contact:Noah
GunnGlobal Head of Investor RelationsApollo Global Management,
Inc.(212) 822-0540IR@apollo.com
Joanna RoseGlobal Head of Corporate CommunicationsApollo Global
Management, Inc.(212) 822-0491Communications@apollo.com
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