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Apollo to NCL – “You’re free to whatever”

Posted by Anita Dunham-Potter On January - 7 - 2008

Norwegian Pearl Private equity firm Apollo Management has closed its $1 billion cash investment into Norwegian Cruise Line Corporation (NCL). The deal now makes Apollo a 50 percent owner of the Miami-based cruise line. Additionally, Apollo will name the the majority of the NCL board. Star Cruises, formerly the sole owner of NCL, will retain certain consent rights.

NCL says the cash infusion will strenghten the company where it will be able to continue funding key ares including fleet expansion and product enhancement. “With the Apollo investment, NCL is now in the strongest financial condition we have ever enjoyed in our 41-year history,” NCL President and Chief Executive Officer Colin Veitch said in a news release. “With both Star Cruises and Apollo as dedicated and supportive shareholders, and with a fleet that has just become the youngest in the industry, we will take our vision of innovation to new and exciting levels.”

Not a cruise line to waste time, NCL recently announced product enhancements under the Freestyle 2.0 initiative which include increased spending of $50 million investment in food alone over the next two years.

Currently, Apollo has $16 billion in assets and tends to focus on underperforming companies. According to the Wall Street Journal, the firm has a strong operational team that knows how to fix up companies and has posted average annual returns of 34 percent.

Apollo is very bullish on the cruise industry, the NCL deal marks its third entry into the high seas within one year — earlier deals include investments in Oceania Cruises and Regent Seven Seas Cruises. Next up for Apollo is partnering with Texas Pacific Group to complete the acquisition of Harrah’s, the nation’s largest casino group.

Look for NCL, Regent and Oceania to work together on deals in the future to make the Apollo-aligned cruise companies more efficient. Additionally, it wouldn’t surprise ExpertCruiser if Harrah’s ends up operating the casinos on the ships — all 20 of them. Stay tuned…

For more on NCL click here


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