A consortium of Goldman Sachs and Macquarie Infrastructure and Real Assets (MIRA) has agreed to acquire Dutch terminals asset HES International, they announced on Tuesday (3 April).
The investment will be held in the Macquarie European Infrastructure Fund 5 (50%), and West Street Infrastructure Partners III (50%). Financial close is expected in the second half.
HES is a European port terminals business, which operates liquid bulk terminals for products such as crude oil, refined petroleum products and bio-fuels, in Rotterdam; Wilhelmshaven (Germany); and Gydnia (Poland). It also operates dry bulk terminals, primarily iron ore and coking coal, minerals and agri-bulk and thermal coal, in Rotterdam, Amsterdam, and Flushing & Terneuzen (Netherlands); Fos-sur-Mer and Dunkirk (France); Liège and Mons (Belgium); Dillingen (Germany); Gydnia; and Hull (UK), some through joint ventures. The portfolio includes EMO (Rotterdam) and a 74.9% stake in OBA (Amsterdam), the two largest dry bulk import terminals in northwest Europe.
The buyers were advised by ING and Goldman Sachs (financial), RBS (debt), Wood MacKenzie (commercial), Arcadis (technical), Allen & Overy (legal), Clifford Chance (lenders legal), EY (financial/tax), Marsh (insurance) and Ramboll (environmental). Sellers Riverstone Holdings and The Carlyle Group’s advisers were Morgan Stanley (sole financial), Clifford Chance (legal), McKinsey & Company (commercial), EY (financial due diligence) and Mott MacDonald (technical).
In 2014, Riverstone and Carlyle acquired the company – then a listed business called HES Beheer – for around EUR 408m. They consolidated some minority interests and oversaw EUR 700m in investments.
In Rotterdam, HES is increasing the capacity of the HES Botlek Tank Terminal from 200,000 cubic metres (cbm) to over 620,000 cbm by 2019, and constructing HES Hartel Tank terminal, scheduled for operation in late 2019, as part of a contract with BP Refinery Rotterdam. The terminal will offer 1.3 million cbm storage capacity for petroleum products (gasoline, diesel, gasoil and jet fuel) and biofuels.
At HES Wilhelmshaven Tank Terminal, HES has repurposed a former refinery into a commercial tank terminal and is preparing to restart part of the primary distillation processing capacity.
The investments are all based on long-term contracts and together are expected to triple operational liquid bulk capacity to 3.2 million cbm.
HES International’s EBITDA is expected to reach EUR 200m by 2021 based on these projects, which also move the company away from coal. Europe is trying to reduce its reliance on coal as an energy source, meaning imports could fall. Some European investors and banks also have ESG criteria which mean they cannot finance the asset.