Share Holders Okay Macquarie, Goldman Sachs to Acquire HES International

 

Macquarie European Infrastructure Fund 5, which is managed by MIRA, and West Street Infrastructure Partners III (WSIP), which is managed by the Merchant Banking Division of Goldman Sachs, have reached an agreement in principle with Riverstone Holdings and The Carlyle Group to acquire HES International. 

 

Capital for the original investment by Riverstone and Carlyle came from two funds: (i) Riverstone/Carlyle Global Energy & Power Fund IV, L.P. and (ii) Carlyle International Energy Partners, L.P. (CIEP).

 

HES will now initiate consultations where appropriate with the relevant works councils. The financial terms of the transaction are not disclosed and should definitive transaction documentation be executed following the consultation process, completion will remain subject to legal and antitrust approvals.

 

HES is one of the largest diversified port terminals businesses in Europe and focuses on the storage and handling of liquid bulk products, such as crude oil, refined petroleum products and bio-fuels, and dry bulk products, primarily iron ore and coking coal, minerals and agri-bulk and thermal coal. 

 

The Company has strategic locations in Europe’s best accessible ports and benefits from highly attractive catchment areas, including key industrial areas in North West Europe, and from deep long-term relationships with blue-chip customers. The Company has built a unique platform of best-in-class liquid and dry bulk terminals operating across Europe, including EMO (Rotterdam) and OBA (Amsterdam), the two largest dry bulk import terminals in North West Europe. 

 

HES has also established the HES Botlek Tank Terminal (HBTT), the newest liquid bulk terminal in North West Europe, and enhanced the transition of HES Wilhelmshaven Tank Terminal (HWTT), the largest independent tank terminal in Germany, to a fully operational terminal.

 

Under Riverstone’s and Carlyle’s ownership, the HES management team has been successfully implementing an over €700 million transformation and growth strategy, including the recent Financial Investment Decision on the landmark Hartelstrip expansion project. This strategy makes HES one of the most significant tank terminal operators in North West Europe while further strengthening its position as a large diversified dry bulk terminal operator in Europe.

 

In tank storage, investments include increasing capacity of the HES Botlek Tank Terminal from 200,000 cbm to over 620,000 cbm by 2019 and the construction of the world class HES Hartel Tank terminal. In Wilhelmshaven, HES repurposed the former refinery into a commercial tank terminal and is currently preparing to restart part of the primary distillation processing capacity under a tolling agreement. These investments are all based on long-term contracts and together they are expected to triple operational liquid bulk capacity to 3.2 million cbm.

 

The transformation program also extends to dry bulk, where HES has consistently diversified into agri-bulk and minerals by expanding its capacity to 900,000 cbm of highly flexible covered storage and supporting HES’s strategy to become a major European operator in this segment.

 

MIRA and WSIP are experienced, long-term infrastructure investors with strong track records of supporting their portfolio companies’ investment plans and they are supportive of the management team’s vision for the Company.

 

Jan Vogel, Chief Executive Officer of HES International, said: “With the support of Riverstone and Carlyle we have become one of Europe’s most successful independent bulk handling companies providing products and services to our customers at 18 sites across 8 countries. Over the past 3.5 years, we have implemented a focused strategy that makes optimal use of our prime real estate in Europe’s key ports and allows us to adjust flexibly to future changes and opportunities that energy transition will bring to our sector. We have also built a strong pipeline of additional growth projects for both our liquid bulk and dry bulk businesses to support our strong position in each of our core businesses. We are confident MIRA and WSIP will be strong, long-term partners for our continued future growth and continued international expansion.”

 

Leigh Harrison, European Head of MIRA, said: “As long term investors we are excited about the growth opportunities HES offers in dry and liquid bulk as well as its strong management team, market position in North West Europe and its focused strategy. Together with our partner WSIP, we are looking forward to supporting management in expanding the business through new growth projects.”

 

Philippe Camu, Co-Head and Co-Chief Investment Officer of the Infrastructure Investment Group within the Merchant Banking Division of Goldman Sachs, said: “We are pleased to invest in HES alongside MIRA and are keen to support the Company in its next stage of development. The HES team has built an impressive business underpinned by strong customer relationships and strategic locations in Europe’s key ports. We look forward to drawing on our experience in the sector for the benefit of HES and its stakeholders.”