May 2 Private equity firm Arsenal Capital
Partners is considering a sale of its business that helps U.S.
oil and chemical companies reclaim import taxes, a partner at
the firm said.
Timothy Zappala told Reuters that other options for the
company, Charter Brokerage, included buying businesses in the
same sector that would make a good fit with Charter.
He declined to put a price tag on Charter but a source
familiar with the matter said it could be valued at up to $500
Charter, which has annual net revenue of about $65 million
to $70 million, is the largest U.S. petroleum and chemical
drawback services provider.
A drawback is the refund of import duties and taxes on a
product when a form of that same product is exported. Charter
Brokerage connects importers and exporters in the petroleum and
petrochemical industries to arrange such refunds.
New York-based Arsenal, which manages over $1.6 billion in
investments, has hired Morgan Stanley to look at strategic
options for Charter, Zappala said in an interview.
"We're a private equity firm, so we're always open to
selling companies at the right value, but I think that's just
one of the options we are considering for Charter considering
their strong market growth dynamics," he said.
The possible sale comes at a time when consolidation is
expected to pick up among U.S. logistics services providers - an
industry that depends largely on acquisitions for growth - after
a slow start in the first quarter.
PricewaterhouseCoopers said in a recent report that
valuations for acquisition targets in the logistics industry in
developed economies were recovering "regardless of whether
strategic or financial investors were involved." (r.reuters.com/xyg98v)
Neovia Logistics LLC, backed by Caterpillar Inc, is
exploring a sale that could value the company at more than $1
billion, people familiar with the matter told Reuters last week.
Private equity firm Oak Hill Capital Partners hired JPMorgan
Chase & Co to explore a sale of logistics provider
Jacobson Companies Inc, hoping to fetch as much as $700 million,
Reuters reported in February.
Zappala, a former Dow Chemical Co executive who sits
on Charter's board, said Arsenal would also consider buying
other companies to complement Charter's services.
"The company is growing very rapidly, due to the increased
trade flows around petroleum and chemical products. We would
probably lean towards maintaining it longer, based on that," he
"If we decided to sell, the most likely buyer would be a
logistics strategic who wanted access to the long-standing
Charter relationships with the major petroleum and chemicals
Founded in 1994, Charter manages customs clearance
documentation for importers and exporters in the United States
and Canada, which allows them to draw back import duties and
Arsenal invests in middle-market specialty industrial and
It acquired Charter from Summit Park Partners in 2008 for an
undisclosed sum, and recapitalized the company in 2012.
(Additonal reporting by Greg Roumeliotis and Mike Stone in New
York; Editing by Saumyadeb Chakrabarty)