Apollo acquires majority stake in Texas RNG operator By Investing.com

HOUSTON – Apollo Global Management Inc. (NYSE: APO) today announced the acquisition of a given majority interest in Freedom CNG, a Texas-based operator of compressed natural gas (CNG) and renewable natural gas (RNG) fueling stations. This investment by the Apollo-managed fund underscores the company's commitment to supporting the energy transition through strategic acquisitions.

Freedom, founded in 2012, has built a network of fueling stations in the greater Houston area that serves a broad clientele, including logistics and transportation companies, municipalities and school districts. These stations are designed to meet the increasing demand for low-carbon alternative fuels and support decarbonization efforts.

Apollo partner Scott Browning emphasized Freedom's strong portfolio and growth potential, highlighting the company's established customer base and development opportunities. Browning expressed Apollo's intention to drive expansion through both organic growth and strategic acquisitions.

Freedom's managing partners Bill Winters and Ronny Cuenod welcomed the partnership with Apollo, citing the additional resources and experience Apollo brings. They are eager to expand operations to meet growing demand for RNG, which is seen as a commercially viable and environmentally friendly fuel option.

The transportation sector, which accounts for more than a quarter of U.S. energy consumption, is in a transition phase and is looking for sustainable energy solutions. RNG, extracted from landfills and other sources, offers significant reductions in emissions without compromising operational efficiency.

Apollo's investment in Freedom is consistent with its broader strategy to deploy capital in energy transition and sustainability-related investments. Over the past five years, funds managed by Apollo have invested approximately $40 billion in various clean energy initiatives, including renewable fuels and technologies to advance decarbonization.

Financial advisory for the transaction was provided by Raymond James & Associates, Inc., while Crady Jewett McCulley & Houren LLP and Baker Botts LLP acted as legal advisors to Freedom. Vinson & Elkins LLP is serving as legal advisor to the Apollo funds.

The acquisition is part of Apollo's broader asset management strategy focused on yield, hybrid and equity investment strategies. As of June 30, 2024, Apollo had approximately $696 billion in assets under management. This transaction is expected to further strengthen Apollo's portfolio in the energy sector and contribute to the overall growth of RNG as a key component of the energy transition.

This report is based on a press release.

In other recent news, Apollo Global Management has been the subject of numerous notable developments. The company's upcoming investor day is expected to provide a comprehensive overview of Apollo's asset management platform and insights into the Athene business, according to Citi, which maintains a buy rating on Apollo stock. Apollo has also made strategic moves to strengthen its origination platform outside the U.S., including a partial sale of its stake in Australian company Challenger and the acquisition of Beequip, a company based in the Netherlands.

In addition to these moves, Apollo was involved in a $900 million refinancing deal with Gannett Co., Inc. that aimed to extend debt maturities and reduce the dilutive impact of convertible bonds. Analysts from firms such as TD Cowen, Redburn-Atlantic, Argus and BofA Securities have offered varying perspectives on Apollo stock, with most maintaining a positive outlook on the company's long-term value proposition. These are the latest developments for Apollo Global Management.

InvestingPro Insights

As Apollo Global Management Inc. (NYSE: APO) makes a significant move in the energy sector with the acquisition of Freedom CNG, real-time data and insights from InvestingPro provide a deeper understanding of the company's financial health and market performance. Notably, Apollo's market capitalization is $63.88 billion, reflecting its significant presence in the financial services industry. The company's price-to-earnings (P/E) ratio stands at 11.96, with the adjusted P/E for the trailing twelve months to Q2 2024 at 12.46. This valuation metric suggests that Apollo's earnings relative to its share price are lower than some industry peers, potentially presenting a value opportunity for investors.

Apollo's commitment to dividends is reflected in the company's record of dividend payments for 14 consecutive years, with a dividend yield of 1.7% at the end of 2024. The company's revenue for the last twelve months to the second quarter of 2024 is reported at $25.96 billion, although during the same period

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