Apollo Global Management (APO) has agreed to acquire a 67% stake in Reno De Medici S.p.A. (RDM Group), an Italy-based manufacturer of cardboard. The deal is expected to close in the third quarter of 2021, following which the company plans to launch a tender offer for the remaining shares to get the company de-listed.
Certain funds managed by Apollo Global’s affiliates are acquiring shares from RDM Group’s two top shareholders, Cascades and Caisse de dépot et placement du Québec, at a price of €1.45 per share, reflecting a premium of 24% over the 90-day volume-weighted average share price.
The transaction will be funded through a combination of the acquirer’s cash resources and a fully committed debt financing facility from international banks of primary standing. (See Apollo Global stock chart on TipRanks)
The Senior Partner and Co-Lead of Apollo Impact, Marc Becker, said, “As the inaugural investment led by the Apollo Impact platform, RDM reflects our strategy to find good businesses where we believe we can drive financial and impact performance to increase their beneficial effects on society and the planet.”
Two months ago, Citigroup analyst William Katz maintained a Buy rating on the stock and raised the price target to $72 from $54.50. The new price target implies 12.1% upside potential from current levels.
Katz is of opinion that although the stock has bounced recently, there is scope for a strong, relative catch-up trade.
Based on 6 Buys and 3 Holds, the stock has a Moderate Buy consensus rating. The average Apollo Global price target of $62.11 implies 3.3% downside potential from current levels. Shares have gained 33.4% over the past six months.
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