Apollo Infrastructure fund buys 49% stake in Spain’s Primafrio

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By Andres Gonzalez and Isla Binnie

MADRID – Apollo Infrastructure, a unit of investment firm Apollo Global Management Inc, has agreed to buy a stake in Spanish road freight operator Primafrio, the companies said in a joint statement on Monday.

A source familiar with the matter told Reuters Apollo was taking a 49% stake in a transaction that valued the family-owned company at around 1.5 billion euros ($1.66 billion).

The founding Conesa Alcaraz family said in the statement it would retain a majority holding and continue to lead the business, which exports fruit and vegetables from Spain and Portugal to other European countries.

The company is branching out to higher-margin sectors including retail and pharmaceuticals as high energy prices squeeze profitability for transport and logistics services.

Fuel costs swelled to equal 17% of Primafrio’s revenue in 2020, even before an energy price spike prompted by economic recovery from COVID-19 shutdowns was exacerbated by Russia’s invasion of Ukraine.

Primafrio had originally planned an initial public offering it hoped would have valued the firm at $2 billion, but scrapped this last June blaming negative market conditions.

Apollo’s co-head of Global Infrastructure Dylan Foo said the deal had been clinched by “navigating the current market volatility”, adding his firm was “attracted to the scale, resiliency, and operational excellence of Primafrio”.

The company made a margin on core earnings before interest and tax (EBIT) of nearly 18% in 2020, according to the prospectus for that deal.

Primafrio was advised by Evercore Partners International and Linklaters. Ashurst LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP advised Apollo Infrastructure.

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($1 = 0.9058 euro)

(Reporting by Andres Gonzalez and Isla Binnie)