Apollo takes Arconic private in $5.2bn deal

August 2023 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

August 2023 Issue

In a move that takes the aerospace supplier private, Arconic Corporation is to be acquired by funds managed by affiliates of global private equity firm Apollo Global Management, Inc., in an all-cash transaction valued at approximately $5.2bn.

Under the terms of the definitive agreement, Arconic shareholders will receive $30 per share in cash. Upon completion of the transaction, Arconic’s shares will no longer trade on the New York Stock Exchange and Arconic will become a private company.

The transaction also includes a minority investment from funds managed by affiliates of investment management firm Irenic Capital Management.

“In the more than three years since we became a standalone company, we have shown the capabilities and potential of Arconic’s employees and assets,” said Tim Myers, chief executive of Arconic. “Our unique product portfolio in an industry with significant potential for growth across the markets we serve positions us to deliver substantial value to our customers and the end users of our products.

“This transaction will provide Arconic with the backing of one of the world’s premier investment firms and will allow us to leverage Apollo’s industry expertise and relationships to pursue our long-term strategic goals,” he continues. “I look forward to working with their team to create opportunities for our employees and provide value to our customers.”

Headquartered in Pittsburgh, Pennsylvania, Arconic is a leading provider of aluminium sheet, plate and extrusions, as well as innovative architectural products that advance the ground transportation, aerospace, building and construction, industrial and packaging end markets.

“This transaction represents a realisation of value for Arconic shareholders at a meaningful premium and enables the company to execute its long-term strategic vision,” added Fritz Henderson, chairman of the board of directors at Arconic. “The board decided to approve this transaction after thorough and thoughtful review of a range of value creation opportunities for shareholders.”

Moreover, with aluminium continuing to win share in markets seeking sustainable, high-performing material across a wide variety of applications, Apollo believes there is a strong runway for growth in markets throughout the world. “We are looking forward to supporting Arconic’s experienced team with our resources and knowledge in the sector to help the company achieve its long-term goals,” added Gareth Turner, a partner at Apollo.

Serving as financial advisers to Arconic are Evercore Group LLC and Goldman Sachs & Co. LLC, with Wachtell, Lipton, Rosen & Katz serving as legal counsel. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to the Apollo funds, with Willkie Farr & Gallagher LLP and Lowenstein Sandler LLP serving as legal counsel to Irenic.

J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are acting as co-lead financial advisers to Apollo, with BMO Capital Markets, Mizuho Securities USA LLC and TD Securities serving as additional financial advisers.

The transaction is expected to close in the second half of 2023, subject to customary closing conditions, including approval by Arconic shareholders and receipt of regulatory approvals.

“Arconic’s talented management team and employees operate a set of premier global assets serving markets that are growing,” concluded Mr Turner. “We are committed to investing significant capital in Arconic to secure its competitive position and world-class product offering to continue building its journey.”

Fraser Tennant