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Apollo Funds, CATEC Launch Hydria through Acquisition of Kelley Leasing Partners

November 16, 2023, 07:05 AM
Filed Under: Mergers & Acquisitions
Related: Acquisitions

Apollo and Composite Advanced Technologies, LLC (CATEC), a provider of compressed natural gas (CNG), renewable natural gas (RNG) and hydrogen transportation and storage solutions in the U.S., announced that CATEC, an affiliate of Apollo-managed funds, has acquired Kelley Leasing Partners (Kelley), a compressed gas and cryogenic liquid transportation equipment leasing company serving hydrogen, helium and CNG customers across industrial gas, utility and virtual pipeline end markets. In connection with the acquisition, Apollo Funds and CATEC have launched Hydria (the Company), a high-growth compressed gas platform providing equipment and services supporting the CNG, RNG, helium and hydrogen value chain with over-the-road transport, storage and leasing capabilities. Apollo Funds are the majority owner of Hydria.

The acquisition of Kelley provides Hydria with enhanced equipment scale and diversification, along with additional manufacturing capabilities, re-testing and maintenance services and significant industry expertise through the Kelley family’s 75 plus years serving the compressed gas space. Ken Kelley, Bryan Kelley and Wes Knapp will join Hydria’s leadership team from Kelley, supporting the growth of leasing and other services.

Seasoned industry executive and long-time Apollo Operating Partner Scott Prince has been appointed Chief Executive Officer of Hydria, bringing extensive experience to the Company from prior collaborations with Apollo affiliates across energy transition growth projects over the last decade.

Hydria CEO Scott Prince said, “The launch of Hydria marks an exciting milestone as the CATEC, Kelley and Apollo teams join forces to spearhead a new platform with significant growth potential in the gaseous logistics industry. Leveraging our collective expertise, we believe Hydria can become a differentiated service provider supporting the end-to-end equipment needs of the compressed gas value chain. We look forward to pursuing various expansion initiatives in support of the energy transition and believe Hydria has a bright future ahead.”

Alberto Chiesara, Co-Founder and President of CATEC, said, “By integrating the combined capabilities of CATEC and Kelley under the Hydria umbrella, we can be better positioned to serve an increasingly diverse customer base across a variety of applications. We want to make it easier for companies to make their operations more sustainable and look forward to leveraging our collective skillsets to pursue opportunities in the high-growth hydrogen transport and storage market.”

Apollo Partner Scott Browning said, “We are excited to partner with Scott and the rest of the standout team and see tremendous potential for Hydria to scale while continuing to add new capabilities to help customers transition away from carbon-intensive fuels towards cleaner alternatives.”

The transaction underscores Apollo’s commitment to driving a more sustainable future and long track record of investing in or lending to companies supporting the energy transition. Last year, Apollo launched its Sustainable Investing Platform, which targets to deploy $50 billion in clean energy and climate capital by 2027 and sees the opportunity to deploy more than $100 billion by 2030. Over the last five years, Apollo Funds have deployed over $23 billion1 into energy transition and sustainability-related investments, supporting companies and projects across clean energy and infrastructure, including offshore and onshore wind, solar, storage, renewable fuels, electric vehicles as well as a wide range of technologies to facilitate decarbonization.

Vinson & Elkins LLP acted as legal counsel to the Apollo Funds. Sprouse Shrader Smith PLLC acted as legal counsel to Kelley Leasing Partners.

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