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Apollo to Gain Five Fold on EVERTEC Sale

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Investment Manager Apollo Global Management, LLC (APO - Free Report) is set to vend its stake in EVERTEC, Inc. (EVTC - Free Report) , the payment processing and merchant acquiring subsidiary of Puerto Rico-based leading bank Popular, Inc. (BPOP - Free Report) . Apollo is expected to book a huge profit of 400% or around $730 million from this move.

As per EVERTEC, employees of Apollo, EVERTEC and Popular will sell their stock in a 15.2 million share offering. Based on EVERTEC’s closing price of $21.11 as on Dec 10, Apollo will expectedly receive about $194 million for its outstanding 9.2 million shares.

Apollo garnered around $260 million and $301 million from EVERTEC’s initial public offering (IPO) in April and the following stock offering in September, respectively. The company was also paid dividend amounting $162 million. Further, this stake sale will fetch Apollo around $917 million in cumulative proceeds, a return that will be five times its $184 million investment in EVERTEC.

The Goldman Sachs Group, Inc. (GS - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) are serving as the lead underwriters for the sale.

Apollo acquired a 51% stake in EVERTEC through a joint venture 3 years back, keeping a 49% stake with Popular. San Juan, Puerto Rico-based EVERTEC, which operates business in Latin America and the Caribbean, had a $100 million IPO in Feb 2013. The exit move came when Apollo started seeking opportunities for greater returns from sale rather than from public listing of EVERTEC shortly after the IPO.

Currently, Apollo has a Zacks Rank #3 (Hold).

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