J.F. Lehman, Apollo, and Hill City Team Up to Buy Atlas Air Worldwide

J.F. Lehman, Apollo, and Hill City Team Up to Buy Atlas Air Worldwide

In FY 2021, Atlas Air Worldwide reported revenues of just over $4.0 billion and an adjusted EBITDA of $1.1 billion

Atlas Air Worldwide's fleet of Boeing 747, 777, 767, and 737 aircraft are used for domestic, regional, and international cargo and passenger operations

SOURCE: Atlas Air Worldwide

Publicly traded Atlas Air Worldwide has agreed to be acquired by an investor group that includes J.F. Lehman & Company, Apollo and Hill City Capital, in an all-cash transaction with an enterprise valuation of $5.2 billion.

Atlas Air Worldwide (AAW) is a provider of outsourced aircraft and aviation operating services. The company’s wholly owned subsidiaries include Atlas Air and Titan Aviation, and majority owned Polar Air Cargo Worldwide.

An Atlas Air Boeing 747-8F [Source: Atlas Air Worldwide]
The company’s fleet of Boeing 747, 777, 767, and 737 aircraft are used for domestic, regional, and international cargo and passenger operations. According to the company, it operates the world’s largest fleet of 747 freighter aircraft.

In FY 2021, AAW reported revenues of just over $4.0 billion, an adjusted EBITDA of $1.1 billion, and free cash flow of $434 million. Based on an enterprise value of $5.2 billion, this equates to a 4.7x EBITDA valuation multiple and a 12.0x free cash flow valuation multiple.

AAW is led by CEO John Dietrich and is headquartered 25 miles northeast of New York City in Purchase, New York. At the close of the transaction, AAW will continue to be led by Mr. Dietrich.

“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 Mr. Dietrich. “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 partner Alex Harman in a released statement. “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 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.”

J.F. Lehman is a middle-market private equity firm focused primarily on the maritime, defense and aerospace sectors. The firm was founded in 1992 by Dr. John Lehman, who served six years as Secretary of the United States Navy. J.F. Lehman is headquartered in New York City with an additional office in Washington, DC.

New York City-headquartered Apollo (NYSE: APO) has more than $513 billion of assets under management and more than $83 billion dedicated to private equity. The firm has acquired more than 350 companies since its founding in 1990.

Hill City Capital is an investor in industrial, aerospace and transportation companies. The firm was founded in 2019 by Herbert Frazier and is headquartered in Boston.

Committed financing to support the buy of AAW is being provided by Goldman Sachs, Barclays, Apollo Capital Management, Mizuho, and Credit Agricole. Morgan Stanley is the financial advisor to AAW.

The transaction is expected to close during the fourth quarter of 2022 or the first quarter of 2023.

© 2022 Private Equity Professional | August 9, 2022

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