Apollo Global Management has agreed to provide $300 million in funding to CH2M. According to terms of the deal, Apollo will invest $200 million in convertible preferred stock in CH2M at the closing, with $100 million more to come within the one-year period following the transaction’s completion. In addition to the funding, Apollo will take two seats on CH2M’s board of directors. Based in Englewood, Colorado, CH2M is a provider of critical infrastructure and natural resource solutions.
DENVER, CO–(Marketwired – May 28, 2015) – CH2M, a global leader in providing critical infrastructure and natural resource solutions with annual gross revenues of $5.5 billion, announced today that it has agreed to partner with an affiliate of Apollo Global Management, LLC (NYSE: APO) (together with its consolidated subsidiaries, “Apollo”), a pre-eminent alternative investment manager with a history of investing in industry-leading companies. Upon the closing of the transaction, which is expected during the second quarter, investment funds managed by Apollo will invest $200 million in convertible preferred stock in CH2M. An additional $100 million investment will occur within the one-year period following closing.
“This investment will add to our financial strength and is the right next step toward spurring CH2M’s continued growth,” said CH2M Chairman and Chief Executive Jacque Hinman. “There is an enormous and expanding need for the work that CH2M does so well — solving some of the world’s toughest infrastructure and natural resource challenges. The financial and strategic benefits from Apollo’s investment and partnership will help us accelerate our growth, deepen our partnership with clients, push the limits on innovation, increase opportunities for our employees, and provide additional liquidity to our shareholders. This transaction will also allow us to consider innovative funding solutions to help our public sector clients meet their growing infrastructure needs.”
Apollo will hold two of six independent director seats on CH2M’s board of directors, while CH2M employees hold seven board seats.
Since the late 1880s, CH2M and its legacy companies have been providing clients with world-class infrastructure and natural resource solutions. In recent years, the company’s services have enhanced quality of life for tens of millions of people around the globe. Example projects include:
Pioneering work in water conservation and reuse, for more than 200 cities, agencies and industries around the world
Implementation of urban regeneration and “smart city” solutions, such as Shendra-Bidkin along India’s Delhi-Mumbai Industrial Corridor
Management of major decommissioning and nuclear remediation efforts in the US and Europe
Implementation of critical infrastructure and development solutions throughout the energy value chain, from oilfield services on Alaska’s North Slope to sour gas development in the Middle East
“Apollo has substantial expertise and a track record of success in making strategic equity investments in strong operating companies, including in the infrastructure and natural resources arena,” said Hinman. “But just as important for us, Apollo is a great cultural fit. Our dedication to strong values in corporate citizenship, ethics, safety and sustainability is highly valued and shared by the Apollo team.”
Apollo was formed in 1990 and currently has $163 billion in assets under management. Socially responsible investing is a core tenet of Apollo’s investment philosophy.
Antoine Munfakh, the lead investment partner for Apollo on this transaction, added: “CH2M is a marquee franchise with a century-long history of pioneering innovative infrastructure solutions for its clients. Today, CH2M remains a market leader serving attractive end markets with compelling opportunities for both domestic and global growth. The company’s success results from an incredibly deep bench of employee talent, and we look forward to bringing Apollo’s resources to bear in furthering that success and helping the company achieve its strategic objectives. The world has critical infrastructure and natural resource needs, and we believe Apollo and CH2M will be great partners in addressing these global challenges.” Mr. Munfakh will join CH2M’s board of directors at closing, along with one additional Apollo designee.
CH2M employs more than 25,000 of the industry’s best professionals and operates in more than 90 countries. CH2M is consistently recognized as one of the world’s top engineering firms by Engineering News-Record and was recently named one of the “World’s Most Ethical Companies” for the seventh consecutive year by the Ethisphere Institute.
CH2M is a global engineering and project delivery company partnering with public and private clients to tackle the world’s most complex infrastructure and natural resource challenges. The firm’s work is concentrated in the water, transportation, energy, environment and industrial markets. CH2M has gross revenues of $5.5 billion, has 25,000 employees and is a specialist in program, construction and operations management and design. For more information, visit www.ch2m.com.
About Apollo Global Management
Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, Chicago, Bethesda, Toronto, London, Frankfurt, Madrid, Luxembourg, Mumbai, Delhi, Singapore, Shanghai and Hong Kong. Apollo had assets under management of approximately $163 billion as of March 31, 2015 in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.agm.com.