Altor-backed OW Bunker plans flotation

The company secured a $700m asset-based credit facility in January, providing OW Bunker with flexible working capital funding and Altor with the opportunity to realise part of its investment. Speculation surrounding Altor's divestment began a year ago, when it was reported that financial services firm Morgan Stanley had been hired to advise on a sale. This would also fit in with Altor's preferred ownership period of 5-7 years.

The IPO will see the company issue new shares and Altor conduct a partial sale of between 40-60% of its stake. The board of directors, management and key employees, as well as certain former employees and board members, are also expected to partially sell their shares in the flotation.

Carnegie Investment Bank and Morgan Stanley are acting as joint global coordinators, and are joined by Nordea Markets as joint bookrunners. AGB Sundal Collier is acting as co-lead manager.

Swedish private equity firm Altor bought OW Bunker via the €1.15bn Altor Fund II vehicle in 2007, as part of its acquisition of the Wrist Group and its subsidiaries. Media reports at the time suggested that the private equity firm paid between DKK 1-2bn for the company.

OW Bunker markets, sells and distributes marine fuels and refuelling-related services to vessels in port and offshore. The firm operates as a physical distributor as well as a bunker reseller through an integrated business model, enabling it to manage the customer relationship throughout the transaction.

Profit rose from $16.3m in 2007 to $68.3m in 2013, a 4.2 x increase in six years. This includes a 26% dip in 2009 after the company managed to double its profits to $34.1m between 2007 and 2008, contributing to an overall 5% increase between 2008 and 2010.

Founded in 1980, OW Bunker employs 622 staff worldwide, located across 38 offices. Operating out of Nørresundby, Denmark, the company has an estimated market share of 7%.

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