It looks like Apollo Global Management (NYSE:APO) wants to dive headfirst into the specialty chemicals business, as the company reportedly plans to acquire Univar Solutions (NYSE:UNVR). As you might expect in this type of situation, UNVR stock investors are pretty pleased with the merger announcement.
Hailing from Illinois, Univar Solutions is a specialty chemical and ingredient distributor with a market capitalization exceeding $5 billion. Univar claims to have the “industry’s largest private transportation fleet and technical sales force.”
Apollo Global Management, meanwhile, is a global alternative asset manager with a market capitalization of $36.5 billion. At the end of 2022, Apollo had around $548 billion of assets under management (AUM).
Today’s big announcement is that Apollo Global Management entered into an agreement to acquire Univar Solutions in an all-cash transaction. This arrangement assigns Univar an enterprise value of roughly $8.1 billion. Furthermore, the transaction “includes a minority investment from a wholly owned subsidiary of the Abu Dhabi Investment Authority” or ADIA.
What’s Happening With UNVR Stock?
It’s not unusual for stocks representing acquired businesses to get a quick bump. So, it makes sense that UNVR stock was up 12% as of 10:30 a.m. Eastern today.
Yet, a vital question lingers: What will happen to Univar Solutions’ current investors? There’s no need to worry, as the agreement specifies a cash payment for Univar Solutions shareholders.
Specifically, UNVR stockholders “will receive $36.15 per share in cash.” That’s a pretty good deal, as $36.15 is higher than the Univar Solutions share price as of this writing. It also “represents a 20.6% premium to the Company’s undisturbed closing stock price on November 22, 2022,” according to the press release.
Univar Solutions President and CEO David Jukes is understandably delighted with this development. He’s “pleased to gain a partner” in Apollo “to support continued investment in our portfolio.” Univar Solutions’ current investors are evidently pleased as well, as they can expect a cash payout above the current share price.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.