Norwegian Cruise Line Holdings Ltd said on Tuesday that it would buy Prestige Cruises International Inc for $3 Billion from Apollo Global Management LLC in a bid to expand its offerings for luxury cruise.
According to New York Times, Norwegian Cruise Line might have to pay an additional amount of $50 million to the shareholders of Prestige if the company reaches its financial targets in 2015.
The shares of Norwegian Cruise were at $37.57, up 13% in early trading.
Prestige was founded seven years ago by Apollo Global Management, a private equity giant, for the purpose of holding the luxury cruise investments. 20% of Norwegian Cruise Line is owned by Apollo after acquiring a significant stake about the same time the company was founded.
TPG Capital and Genting Hong Kong Limited, who have accepted the purchase, are the other main shareholders of Norwegian Cruise Line. They own around 36% cumulatively of the company. It is expected that the deal will be finalized by the close of 2014.
Reuters reported that Prestige, which registered with the US regulators in January for an IPO, owns cruise operators like Regent Seven Seas Cruises and Oceania Cruises. Norwegian Cruise said that it would finance the purchase with debt, existing cash and a stock offering of approximately 20.3 million shares.
Norwegian Cruise is receiving committed financing from Deutsche Bank, J.P. Morgan Securities LLC and Barclays for the purchase. Norwegian Cruise added that the deal will add earning and lead to initial savings of $25 million.
The company has Barclays as its financial advisor and Weil, Gotshal & Mangles LLP as its legal advisers. A transaction committee for the board was advised by law firm, Cravath, Swaine & Moore and Perella Weinberg Partners. Prestige Cruises has UBS Investment Bank as its advisers and Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal advisers.
To contact the reporter of the story: Yashu Gola at yashu@forexminute.com
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