Fri 10 Jan 2014 09:22

Altor mulls OW Bunker listing


Private equity group says OW Bunker "could be very attractive to list".



Private equity group Altor has indicated that it may consider an exit strategy for Danish marine fuel supplier OW Bunker in the near future, which could be through a stock market listing.

Speaking to Reuters, Altor's head of Danish activities, Soren Johansen, is quoted as saying: "An exit may well come in the foreseeable future. It's clear that this company, with its growth potential and its characteristics, could be very attractive to list."

The Nordic-focussed investor has owned OW Bunker since acquiring its parent Wrist Group in July 2007 for an undisclosed amount. In an interesting insight into its investment strategy, Altor says on its website that it normally owns businesses for five to seven years.

Over the past 15 months, OW Bunker has continued its expansion through the acquisition of Norwegian firm Bergen Bunkers, started a physical supply operation in the Gulf of Mexico, launched a Nordic Waters supply operation, started a physical fuel supply operation in West Africa and opened an office in Colombia.

OW Bunker posted a profit of $54 million on sales of $14 billion in 2012. Wrist Group sales for 2012 increased by 19.6% to $14.6 billion from $12.2 billion in 2011, and earnings before tax increased by 16% to $76 million, compared to $66 million the previous year.

Other leading bunker players with stock market listings include World Fuel Services Corporation, Aegean Marine Petroleum S.A. and Chemoil Energy Ltd. World Fuel Services is valued at approximately 15 times profit. Assuming therefore that OW Bunker's 2013 profit increased in line with recent years, a multiple of 15 times would yield a value of around $1 billion.

Earlier this week, OW Bunker secured a $700 million revolving credit facility, refinancing its current $450 million facility, to support its growth plan, thus presenting Altor with an attractive window of opportunity for a stock listing should it decide to opt for an exit strategy.

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