NEW YORK (The Deal) -- Norwegian Cruise Line Holdings (NCLH) , the Miami-based cruise ship operator, is buying Prestige Cruises International in a $3.025 billion deal, pairing together two recreation companies that share a common private equity backer — Apollo Global Management LLC.
The deal is a mix of cash and stock, but no breakdown of how much of each was provided. Officials from Norwegian, Prestige and Apollo didn't return calls. Norwegian investors cheered the deal, which was announced jointly by the two companies Tuesday, bidding its shares up 11%, to end the day at $37, up over 4% for the year to date.
Apollo has a minority stake in Norwegian and a majority stake in Prestige. Fort Worth PE firm TPG Capital LP, which invested alongside Apollo, also maintains a minority stake in Norwegian. Genting Hong Kong Ltd. is also an investor in Norwegian.
In 2013, the companies posted nearly $3.8 billion in combined revenue -- with more than $2.5 billion coming from Norwegian. Norwegian's market cap following the deal's announcement is $6.75 billion. So, at $3.025 billion, Norwegian is paying roughly 2.3 times Prestige's 2013 revenue.
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According to the deal announcement, Norwegian's fleet will swell to more than 20 ships with the Prestige acquisition. Through Prestige's fleet, Norwegian will also be able to access the luxury cruise market.
Further, with the company's top competitors -- Carnival Corp. (CCL) and Royal Caribbean Cruises (RCL) -- bigger than Norwegian in terms of both market capitalization, as well as fleet size, the company is building scale against the largest players in its industry. Carnival's market cap is $29 billion and operates a number of global cruise brands. Royal Caribbean operates more than 40 ocean liners.