Apollo Group's $37 billion trifecta

Posted Dec 20th 2006 12:20PM by Tom Taulli
Filed under: Private Equity, Harrah's Entertainment (HET)

From Sunday to Tuesday, the private equity firm Apollo Group struck $37 billion in deals, buying Realogy and Harrah's. This is the subject of an excellent piece in today's New York Times.

The master of the universe at Apollo is Leon Black. And he is a veteran. During the 1980s, his mentor was Mike Milken. If you look back into the 1980s, Milken did some big deals in the casino industry (he was the key backer for gaming mogul Steve Wynn). So it makes sense that Apollo is gravitating to the gambling space with its big play for Harrah's.

Black has a knack for finding value. When the junk bond market imploded in the late 1980s, he was there to buy the gems. He is also has lots of experience with distressed companies and understanding the intricacies of bankruptcy.

If the boom in private equity deals falls apart (which seems inevitable), Black will probably know how to capitalize on that situation too.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.

Tags: Apollo Group, ApolloGroup, Leon Black, LeonBlack, Mike Milken, MikeMilken

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Reader Comments (Page 1 of 1)

12-21-2006 @ 11:16AM

Charles said...

Here's an important clarification. Leon Black's group is *not* the Apollo Group (NASDAQ APOL), but rather Apollo Management LP. The difference is real important since the Apollo Group is the parent corporation for the University of Phoenix (their cash cow) and has absolutely nothing to do with Leon Black or the recent acquisitions by Apollo Management and Leon Black even though some recent news stories have incorrectly identified the Apollo Group (APOL) as Black's company. Careless reporting. For investors this is really an important clarification since the Apollo Group is currently assailed with shareholder class action law suits with their stock in a two year nosedive.