[ID] => 9678
[post_author] => 34
[post_date] => 2018-05-22 08:58:57
[post_date_gmt] => 2018-05-22 07:58:57
[post_content] => For more than a decade now, mergers and acquisitions involving bulk liquids storage terminal operators have been a feature of the equity investment business. Funds have been drawn to the sector by the attractive and comparatively dependable income streams that terminals can generate, especially at times when more traditional avenues have been providing poorer returns.
That process has continued over the past year, with a number of major transactions reported. In some cases, deals have been arranged with investment funds on both sides of the contract, as existing investors cash in on their assets or seek to rebalance their portfolios in light of changes to investment strategies.
A prime example of this is the interesting being shown in HES International. In April this year funds managed by Macquarie Infrastructure and Goldman Sachs announced their intention to acquire HES International from Riverstone Holdings and the Carlyle Group. HES focuses on the storage and handling of liquid and dry bulk products in Europe, with its liquids facilities including Botlek Tank Terminal and Wilhelmsen Tank Terminal, alongside the new Hartel site currently under development in Rotterdam’s Maasvlakte area.
“With the support of Riverstone and Carlyle we have become one of Europe’s most successful independent bulk handling companies providing products and services to our customers at 18 sites across eight countries,” says Jan Vogel, CEO of HES International. “Over the past 3.5 years we have implemented a focused strategy that makes optimal use of our prime real estate in Europe’s key ports and allows us to adjust flexibly to future changes and opportunities that energy transition will bring to our sector.”
Late last year HES International also signed an agreement to acquire the Valt Asphalt Terminal in Botlek, Rotterdam. The terminal, a joint venture between Vitol and Sargeant, provides storage, handling and blending services for the European and African bitumen market and is located close to HES’s existing Botlek Tank Terminal and European Bulk Services facilities. HES says it will invest to upgrade the terminal over the course of 2018 with new tanks and ancillary infrastructure.
INVESTOR TO INVESTOR
Another change of investor happened last year at LBC Tank Terminals, when retirement funds State Super and Sunsuper sold their stakes to private investment firm Ardian, giving it a 35 per cent holding. This makes it the largest shareholder, alongside APG and PGGM, both with 32.5 per cent.
“LBC is at a significant transition point in its business strategy, in particular as the business shifts its focus toward expansion of its facilities in USA and Europe. This trend has been identified by Ardian and we value the experience and support they can provide to LBC during this period of strategic change,” LBC’s CEO, Walter Wattenbergh, said at the time.
A new name in the tank storage field is Alkion Terminals, launched in 2016 by InfraVia Capital Partners and Dutch energy firm Coloured Finches. In mid-2017 Alkion acquired eight smaller terminals in France, Spain and Portugal from LBC, as well as the partly owned Sogestran site. It then acquired a 230,000-m³ terminal in Vado Ligure, near Genova, from the Italian state energy firm ENI. Alkion now has ten terminals in five countries in Europe, with an aggregate capacity of some 1.3m m³.
A more established investor making waves over the past year has been Warburg Pincus, lead investor in the acquisitive firm Zenith Energy. Last August Zenith agreed to acquire Arc Logistics Partners through a deal with Arc’s major owner, Lightfoot Capital Partners, marking Zenith’s first foray into the US market. “Arc Logistics’ diversified portfolio of logistics assets serves critical links between supply and demand locations in the US and we intend to further develop their existing terminals as well as pursue new developments throughout North America,” said Jeff Armstrong, president/CEO of Zenith Energy, at the time. The acquisition added some 7m bbl (1.1m m3) of storage capacity in the US to Zenith’s existing network in the Netherlands, Ireland and Colombia, which together represent more than 15m bbl of storage for crude oil and petroleum products.
Zenith Energy subsequently bought a bulk liquids storage terminal in Hamburg, Germany from Royal Dutch Shell. The Hamburg terminal is situated on 55 ha of land and has a potential storage capacity of 480,000 m³. Its acquisition in January 2018 was the third major deal for Zenith in Europe, following its purchase of terminalling assets in Amsterdam from BP in 2016 and the Bantry Bay terminal in Ireland from Phillips 66 in 2015.
Meanwhile, at the start of this year, Zenith Energy sold a 51 per cent interest in the Pawnee, Colorado crude oil terminal to Tallgrass Terminals for $31m. The Pawnee Terminal acts as an injection point for the Tallgrass Pony Express Northeast Colorado Lateral and has 300,000 bbl of storage capacity. Tallgrass has also acquired a 38 per cent interest in Deeprock North LLC, which owns a crude oil terminal in North Cushing, Oklahoma. Deeprock North has now been merged into Deeprock Development, with a total storage capacity of some 4.0m bbl, in which Tallgrass has an overall 60 per cent interest.
ArcLight Capital Partners, which owns TransMontaigne Partners’ general partner, has set up a joint venture with BP West Coast Products covering refined product logistics in the US Pacific Northwest. The deal was anchored by the purchase of two large-scale refined products terminals in Seattle, Washington and Portland, Oregon from BP, which are being operated by ArcLight affiliate TLP Management Services.
Last year TransMontaigne made a further acquisition on the US west coast, buying the Martinez and Richmond terminals in California from Plains All American Pipeline for $275m.
The established Australian investment funds have also been active lately, particularly Macquarie Infrastructure Corp, which owns International-Matex Tank Terminals (IMTT). In August last year IMTT entered into an agreement to acquire Epic Midstream from affiliates of White Deer Energy and Blue Water Energy. The transaction valued Epic at $171.5m. Epic operates seven terminals in the south-east and south-west US, with its main marine terminal operations in Savannah, Georgia. Aggregate storage capacity is some 3.1m bbl (492,000 m³) for petroleum products, asphalt, biofuels and chemicals.
Macquarie was also involved in the sale of Odfjell’s 50 per cent shareholding in the 377,000-m³ Oiltanking Odfjell Terminal Singapore (OOTS) last October; Odfjell received some $300m for its holding in a deal involving Macquarie Infrastructure and Real Assets (MIRA), booking a net gain of some $135m. “This divestment is in line with our strategy to focus on the terminals where we have managerial control of the assets and to further invest in growth opportunities in our core markets, such as Houston and Rotterdam," CEO Frank Erkelens said at the time. This followed on from Odfjell’s sale of a 35 per cent indirect ownership in the Exir Chemical Terminal in Iran to Oiltanking in June 2017.
Subsequently, however, Lindsay Goldberg has suggested it may look to sell its 49 per cent interest in Odfjell Terminals BV, in which case Odfjell may seek buyers for its Rotterdam terminal.
Another Australia-based fund, Prostar Capital, acquired Socar Aurora Fujairah Terminal early in 2018. The terminal currently has 350,000 m³ of tank storage for refined products, with a further 315,000 m³ under construction and room for another 150,000 m³. Prostar already had a 40 per cent interest in the nearby Fujairah Oil Terminal.
London-based Whitehelm Capital acquired a 90 per cent stake in Vopak Terminal Eemshaven, a joint venture between Vopak and NIBC European Infrastructure Fund, in September last year. Vopak continues to manage and operate the terminal. The 11-tank, 684,000-m³ facility is used for the strategic storage of gasoil, gasoline and other refined products and has a deepwater jetty to handle oceangoing ships. Whitehelm focuses on investing in infrastructure assets with stable long-term cash flows and, Vopak says, has a long history of investing in the tank storage sector, including Oikos Storage in the UK.
Elsewhere in the North American midstream sector, SemGroup Corp has been busy, not least with the acquisition last year of Houston Fuel Oil Terminal Co (HFOTCO) from investment funds managed by Alinda Capital Partners for a sum that could be as high as $2.1bn, depending on performance. The deal was, SemGroup says, “part of its long-term strategy to add secure, downstream cash flow to its portfolio mix”.
HFOTCO is located on 330 acres of land along the Houston Ship Channel. The business is fully supported by take-or-pay contracts with primarily investment-grade counterparties that have been customers for an average of 15 years. HFOTCO is currently executing on contractually supported growth projects, including a new ship dock, a new pipeline and connections, as well as an additional 1.45m bbl of crude oil storage that is expected to be in service mid-2018.
Following the acquisition of HFOTCO, and as part of its efforts to trim its borrowings, SemGroup sold its UK petroleum storage business, SemLogistics, to Valero Logistics UK Ltd, a wholly owned subsidiary of Valero Energy Corp. SemLogistics’ main asset is the 1.4m-m³ Milford Haven terminal in Wales.
There has also been some activity on the part of the major international trading houses. Glencore, for instance, sold a 51 per cent interest in the newly formed HG Storage International Ltd (HGSI) to HNA Innovation Finance at the start of this year. HGSI was set up to consolidate Glencore’s petroleum products storage and logistics businesses in strategic ports in Europe, Africa, the Middle East and the Americas. The $775m transaction is being carried out in two phases as the transfer of the interest in Glencore’s three US sites is subject to regulatory approval. Glencore and HNA say they plan to expand the HGSI footprint through acquisition and organic growth.
Refiner/trader Gunvor agreed last October to sell its shareholding in the Maasvlakte Oil Terminal in Rotterdam to Aramco Overseas Co. Gunvor says the divestment is part of its strategy to invest in its Rotterdam refining operations. For Aramco Overseas, the deal will support its refining activities in north-west Europe, strengthening its export supply chain.
Many of the other newsworthy deals recorded over the past year have involved midstream assets in North America. For instance, in October last year Pin Oak Terminals acquired Gravity Midstream Corpus Christi, now renamed Pin Oak Corpus Christi, in a deal secured by financing from Pin Oak’s owners, Dauphine Midstream and Mercuria Energy. The terminal offers 737,500 bbl (117,250 m³) of storage capacity, pipeline links to nearby refineries, a crude processing unit and asphalt plant, rail loading and unloading facilities, truck racks and a dock capable of handling Aframax tankers. Pin Oak says there are long-term contracts in place that will allow it to significantly expand operations.
Delek Logistics Partners and Green Plains Partners have formed a 50/50 joint venture, DKGP Energy Terminals LLC, to invest in storage terminals for light refined products. DKGP’s first acquisition involved two light products terminals owned by an affiliate of American Midstream Partners and located in Texas and Arkansas. DKGP is understood to have paid $138m for the assets this past February.
[post_title] => M&A: Value added
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[post_name] => ma-value-added
[post_modified] => 2018-05-22 08:58:57
[post_modified_gmt] => 2018-05-22 07:58:57
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As with current newbuilding projects, much of the interest in mergers and acquisitions in the terminal sphere is focused on North American assets