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Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) Acquires Prestige Cruises for $3 Billion

Boston, MA 09/03/2014 (wallstreetpr) – Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) has confirmed it has reached an agreement for the acquisition of Prestige Cruises as it seeks to add more flair to its luxury brands offerings. Reuter’s reports that a deal worth $3 billion has been’ agreed between Norwegian Cruise Line and Apollo Global Management LLC (NYSE:APO).

Impact of the Merger        

Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) shares reacted positively to the news on Tuesday trading session, surging by highs of 11.05% to close the day at a high of $36.99. Prestige had registered back in January for an initial public offering and is reported to own Oceania Cruises as well as RegentSeven Seas cruises. The cruise industry is estimated to be worth $29 billion with huge growth potential going forward.

Part of the deal will see Apollo Global Management, which owns 20% stake in Norwegian Cruise Line being entitled to $50 million in cash if the company achieves certain agreed performance metrics. Norwegian Cruise Line plans to finance the transaction with existing cash, as well as through new and existing debt. There will also be an issuance of about 20.3 million shares.

Growth to come From Emerging Markets

Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) currently operates a total of 13 cruises through key routes of Baltic, North America and Mediterranean. The company’s total revenue for 2013 was up by 13% from 2012, coming in at $2.57 billion. Analysts expect the cruise industry to benefit a great deal from the ongoing growth in the emerging economies such as China and India. Cruise companies are already positioning themselves as they look to tap into the new customers going forward.

Barclays PLC (ADR) (NYSE:BCS), JPMorgan Chase & Co. (NYSE:JPM) Securities and Deutsche Bank AG (USA) (NYSE:DB) are expected to provide financing for the deal, which is expected to result in $25 million worth of initial savings. Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH) top two shareholders, Genting Hong Kong and TPG Capital have already agreed to the acquisition.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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