Altor Equity Partners acquired OW Bunker in 2007
The parent company of OW Bunker is looking to sell the independent marine fuel supplier, and has hired financial services firm Morgan Stanley [NYSE:MS] to advise it on the sale, three anonymous sources familiar with the matter told Reuters today.
Swedish private equity firm Altor Equity Partners (Altor) acquired OW Bunker in 2007 when its €1.15 billion ($1.5 billion) Altor Fund II investment vehicle bought the Wrist Group and its subsidiaries.
Altor and Morgan Stanley have so far declined to comment on the matter.
Altor Fund II's investors include Harvard Management Company, Princeton University, Goldman Sachs Private Equity Group, and Swedish inurance group Länsförsäkringar Liv, the Alternative Assets Network reported at the time of the fund's closing.
The supplier more than doubled its profits between 2007 and 2008, up from $16.3 million to $34.1 million
OW Bunker's most recent annual report was for 2011, when it reported a 24 percent year-on-year rise in profits to just over $45.0 million, 2.75 times higher than the $16.3 million it reported for Altor's acquisition year of 2007.
However, despite the fact that the supplier more than doubled its profits between 2007 and 2008, up from $16.3 million to $34.1 million, it managed an improvement of just 5 percent between 2008 and 2010, from $34.1 million to $35.7 million, after a 26 percent drop for 2009 took its bottom line to $25.1 million.
New York listed World Fuel Services Corp. [NYSE:INT] (WFS) recently reported a 2012 net income of $189.3 million, and with a market capitalisation of $2.88 billion, it values the business at just over 15 times profit.
Applying the same 15 times multiplier to OW Bunker's 2011 profits of $45 million would value the business at $675 million.
In November 2012 OW Bunker launched physical supply operations in the U.S., and in January said it had created "one of the world's largest maritime physical bunkering operations" in terms of area covered through the unification of its operations in Northern Europe.