Apollo, Athene Sign Deal to Acquire Controlling Stake in Aqua Finance

Apollo Global Management (APO) and Athene Holding (ATH) have signed an agreement to acquire a controlling stake in Aqua Finance for about $1 billion. The deal is expected to close in the first half of 2022.

As per the terms of the deal, the investment will be managed by Apollo on behalf of Athene. Also, Blackstone will continue to hold a minority stake in the company.

Aqua Finance originates and services consumer loans, primarily for home improvement and water treatment, from funds managed by Blackstone Tactical Opportunities. The company’s annual loan originations are expected to reach $2 billion in 2021. (See Apollo stock chart on TipRanks)

Apollo and Athene plan to invest in new technology and innovation to improve merchant customer experience and deepen network with new and existing partners. After the completion of the deal, Apollo’s current $80 billion annual run-rate of asset origination across its platforms will increase.

Executive Comments

The CEO at Athene, Jim Belardi, said, “Aqua Finance is an exciting opportunity for Athene to invest in a leading consumer finance platform, to provide capital and expertise to continue to grow the business, and to execute on our strategy with Apollo to invest in high-quality origination platforms.”

The Co-President of Apollo, Jim Zelter, said, “For more than three decades, Aqua has partnered with merchants to provide flexible consumer lending solutions, and with Athene we look forward to investing in the business and supporting the Aqua team to build on this success. For Apollo and Athene, Aqua is highly complementary to our portfolio of diversified origination platforms, extending our access to quality consumer loan flow.”

Stock Rating

Earlier this month, Argus Research analyst Stephen Biggar maintained a Buy rating on APO and raised the price target to $90 (upside potential of 22.7%) from $76.

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 6 Buys and 4 Holds. The average Apollo price target of $87.63 implies 19.5% upside potential.

Smart Score

APO scores a 9 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to outperform market averages.

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