New York-based investment manager Apollo Global Management, LLC’s (APO) wholly controlled subsidiary recently completed the acquisition of Bethesda based MidCap Financial LLC. The terms and conditions of the deal, however, were not divulged.
MidCap Financial specializes in the middle market healthcare lending business and has approximately $2 billion assets under management. With over 150 lending relationships, this healthcare oriented financial firm is expected to help Apollo Global Management expand in the thriving U.S. healthcare market.
Apollo Global Management intends to capitalize on MidCap Financial’s healthy pipeline of loans, stable credit history and field expertise to boost profitability in the long run.
On the other hand, though MidCap Financial will continue with its lending activities, this divesture will help increase its access to capital and product offerings. Therefore, the partnership will enable it to provide enhanced services for its existing client base.
Merrill Lynch, which is a part of Bank of America Corp. (BAC), and SunTrust Robinson Humphrey, an affiliate of SunTrust Banks, Inc. (STI), along with Moelis & Company acted as advisors to MidCap Financial for the transaction.
Apollo Global Management third-quarter 2013 results were impressive, with economic net income (ENI) of $1.34 per share that included positive earnings surprise of 78.7%. Moreover, the company has raised funds worth $14.0 billion in the preceding four quarters. Given its earnings power and ability to raise capital, the private equity firm is favorably positioned to engage in similar acquisition activities going forward.
Apollo Global Management currently carries a Zacks Rank #3 (Hold). A better placed investment manager is Artisan Partners Asset Management Inc. (APAM), which has a Zacks Rank #1 (Strong Buy).