The deal, expected to close in the third quarter of 2023, will add approximately $50 billion in assets under management to Apollo’s portfolio, nearly doubling its real estate AUM to $110 billion. This expansion brings Apollo closer to its rivals Blackstone and KKR, which have substantial real estate holdings.
Under the terms of the agreement, Bridge stockholders will receive 0.07081 shares of Apollo stock for each share of Bridge Class A common stock, valuing Bridge at $11.50 per share. This represents a premium of about 45% over Bridge’s closing price of $7.92 on the Friday before the announcement. The market responded positively to the news, with Apollo’s stock rising 0.8% and Bridge Investment’s stock surging 35%.
The acquisition aligns with Apollo’s ambitious growth targets, including managing $1 trillion in assets by 2026 and $1.5 trillion by 2029. Piper Sandler analyst John Barnidge noted that the deal would contribute to Apollo’s five-year goal of 20% growth, reiterating an overweight rating on Apollo’s stock.
Apollo Partner David Sambur emphasized that the firm’s real estate business was “growing but not yet at scale,” and this acquisition aims to address that gap. The deal is expected to enhance Apollo’s origination capabilities in both real estate equity and credit, with opportunities in housing, logistics, commercial real estate debt, and “core plus” properties requiring light capital improvements.
Post-acquisition, Bridge will operate as a standalone platform within Apollo’s asset management business. In a move to ensure continuity, Bridge Executive Chairman Bob Morse will become an Apollo partner and lead the firm’s real estate equity business. This leadership transition is seen as a positive step in integrating the two firms’ operations and expertise.
