Arsenal Considers Selling Logistics Business

Posted by Eric Haun
Friday, May 02, 2014

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 million.

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." (http://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 said.

"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 companies."

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 taxes.

Arsenal invests in middle-market specialty industrial and healthcare companies.

It acquired Charter from Summit Park Partners in 2008 for an undisclosed sum, and recapitalized the company in 2012.

(By Sagarika Jaisinghani; Additonal reporting by Greg Roumeliotis and Mike Stone in New York; Editing by Saumyadeb Chakrabarty)

Maritime Reporter October 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Gazprom Transgaz Ufa Organizes Arts Festival

Over 200 healthy children and children with disabilities from Bashkortostan as well as the Volga Region participated in the Breaking the Barriers second interregional children’s arts festival,

President Pryor Retires from ExxonMobil Chemicals

Stephen D. Pryor, president, ExxonMobil Chemical Company and vice president of Exxon Mobil Corporation, has elected to retire on January 1, 2015, after more than 44 years of service.

Steven Palazzo Visits HII, Newport

Huntington Ingalls Industries today hosted Rep. Steven Palazzo, R-Miss., for a tour of the company's Newport News Shipbuilding division. Palazzo represents the fourth district of Mississippi,

Finance

Time-out for Kwanza Drilling

Statoil has decided to cancel the Stena Carron rig contract after fulfilling the work commitments in the Statoil-operated blocks 38 and 39 in the Kwanza basin offshore Angola.

Oil Deal Between Iraqi Kurdistan & Baghdad Welcomed

The United States welcomes an agreement between Iraq's central government in Baghdad and its northern Kurdistan region over the management of oil exports, U.

Nigeria to Cut Petrol Subsidy by Half

Nigeria plans to cut subsidies on petroleum products by half next year after sharp falls in global crude prices, spurred the government to revise its 2015 budget downwards,

News

7 Rescued from Sinking Freighter Near Haiti

Seven crewmembers were rescued after their 100-foot coastal freighter began taking on water and sank approximately 45 miles north off of Cap Haitien, Haiti, Friday.

Gazprom Transgaz Ufa Organizes Arts Festival

Over 200 healthy children and children with disabilities from Bashkortostan as well as the Volga Region participated in the Breaking the Barriers second interregional children’s arts festival,

Time-out for Kwanza Drilling

Statoil has decided to cancel the Stena Carron rig contract after fulfilling the work commitments in the Statoil-operated blocks 38 and 39 in the Kwanza basin offshore Angola.

Logistics

October Imports up 9% at Port of Oakland

Containerized imports shipped through the Port of Oakland were up 9.17% in October from a year ago, the port said, citing the surge as the biggest jump in import cargo volume in six months.

Cost to Fuel Ships Falls

For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as $1 million a year if current price level stay put. Assuming

Asia Tanker, VLCC Rates Could Climb

Charterers to release 30 Middle East VLCC cargoes next week. VLCC market buoyed by upbeat Suezmax, Aframax sectors. Rates for very large crude carriers (VLCCs)

 
 
Maritime Contracts Maritime Security Naval Architecture Navigation Offshore Oil Pod Propulsion Port Authority Ship Electronics Ship Repair Ship Simulators
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1261 sec (8 req/sec)