COPENHAGEN Jan 9 Private equity group Altor is eyeing a sale of Danish ship fuel supplier OW Bunker, possibly through a stock market listing, the Nordic-focused investor said on Thursday.
OW Bunker this week secured a $700 million credit facility to support its growth strategy in the highly fragmented industry, presenting Altor with an attractive window of opportunity for a listing that could give the business a value of $1 billion.
"An exit may well come in the foreseeable future," Altor's head of Danish activities Soren Johansen told Reuters. "It's clear that this company, with its growth potential and its characteristics, could be very attractive to list."
Altor, which says on its website that it normally owns businesses for five to seven years, has owned OW Bunker since buying its parent Wrist Group in July 2007.
No indication was given on the price Altor paid, though local media said that it could have been anywhere between 1 and 2 billion Danish crowns ($182-364 million).
The business has increased its global presence significantly since then and now competes with U.S. group World Fuel Services for top spot in shipping fuels, known as bunker fuels. The two companies each control an estimated 7 percent of the global market.
OW Bunker will use the credit facility agreed this week to ensure it is not left behind as consolidation in the shipping industry prompts a wave of mergers among its suppliers.
"If we as a subcontractor do not comply, we lose the competitive edge. Our customers drive our industry to growth and consolidation," Chief Executive Jim Pedersen told Reuters on Wednesday, pointing out that OW Bunker is now twice as big as it was four years ago.
OW Bunker posted a profit of $54 million on sales of $14 billion in 2012. No newer figures have been released, but in the previous two years net profit rose by about 25 percent on average.
World Fuel Services, the U.S. company that sells marine, aviation and land fuel products, is valued at about 15 times profit. Assuming that OW Bunker's 2013 profit increased in line with recent years, a multiple of 15 times would yield a value of about $1 billion.
Other leading players in the industry include Chemoil Energy and Aegean Marine Petroleum Network.