Aegean Marine Petroleum Network Inc. (NYSE:ANW) (“Aegean” or the
“Company”) is pleased to announce that today it has entered into a
definitive agreement to acquire all of the outstanding share
capital of H.E.C. Europe Limited (“H.E.C.”), the parent company of
Hellenic Environmental Center S.A. and a group of companies that
together provide global port reception facilities services (the
“HEC Group”), from the shareholders of H.E.C. (the “Sellers”), for
aggregate consideration of approximately $367 million, including
the assumption of certain indebtedness, which consideration is
payable in the form of a combination of debt, the assignment of
certain accounts receivables, cash (determined in accordance with
the definitive agreement) and shares of Aegean common stock (the
“Consideration Shares”), which will represent approximately 33% of
the issued and outstanding common stock of Aegean after giving
effect to the issuance. The Sellers are companies owned and
controlled by Dimitris Melisanidis (Aegean’s founder and former
Head of Corporate Development) and certain members of his family,
and members of the Agiostratitis family (collectively, the “Seller
Owners”). Aegean expects the acquisition, which results from
several months of negotiations, to be immediately accretive to
adjusted earnings per share in year one.
The acquisition was unanimously approved by the
Aegean Board upon the recommendation of a special committee of
independent directors (the “Special Independent Committee”). In
making its recommendation, the Special Independent Committee
consulted with its independent financial advisor, Clarksons Platou
Securities, Inc. (“Clarksons Platou Securities”) and outside legal
counsel. The acquisition does not require the approval of Aegean’s
shareholders.
Highlights of the
Acquisition:
- Significant Synergy Potential: The combined
company has the potential to achieve significant synergies through
repurposing/redeploying idle or underutilized Aegean vessels and
consolidating corporate facilities.
- Improved Utilization of Geographic Footprint:
The HEC Group can leverage Aegean’s existing team and port
relationships to expedite its market penetration. The expanded
geographic footprint will allow the HEC Group to sell its services
into more than 30 markets worldwide.
- Attractive, “Utility-Like” Business Model: The
transaction is expected to help diversify Aegean’s current business
model and reduce its dependency on bunker-market related sales. HEC
Group’s high-margin and recurring revenues, which are secured by
long-term significant port relationships, are expected to further
improve stability of cash flows of the combined company.
- Entry into an Exciting and Untapped Market:
The combination of the HEC Group and Aegean creates one of the
largest providers of port reception facility services and
establishes a committed market leader in the rapidly growing global
environmental market. Environmental regulatory trends in the
industry are expected to generate increased and sustainable demand
for HEC Group’s services.
- Increased Long-Term Customer Base: Customers
from both companies will benefit from the complementary services
that the HEC Group and Aegean can provide. Through this
combination, there will be significant marketing opportunities.
- Significant Upside Growth Potential: In
addition to strong organic growth, the HEC Group’s identified
acquisitions and geographic expansion projects provide immediate
and actionable growth opportunities. Aegean believes that the HEC
Group can be a global industry leader with significant growth in
EBITDA over time.
- Financial Impact: Aegean expects the
acquisition to be immediately accretive to adjusted EPS in year
one. Post-closing of the transaction, expected additional 2018E
Revenues will amount to approximately $60-65 million and 2018E
EBITDA will amount to approximately $35-40 million, which assumes
timely closing of the transaction and completion of targeted
acquisitions in 2018.
Yiannis Papanicolaou, Chairman of the Board of
Directors of Aegean, stated, “For the past several quarters, the
Board and senior management have contemplated strategic options for
Aegean reflecting the prospects of the traditional bunkering
business, the challenges associated with the transition towards a
market with a different product mix and the ever-growing needs of
the shipping industry for greener products and services. The
acquisition of H.E.C., a world leader in its field, is our first
decisive step in the direction of combining higher profitability
for our shareholders with environmental sustainability and social
accountability. Our next priority is the elaboration of a roadmap
to operate successfully within the new landscape post-2020 IMO
regulatory changes and beyond.”
Jonathan McIlroy, Aegean’s President, commented,
“I want to welcome Darren and the H.E.C. team to the Aegean family.
The acquisition of H.E.C. enables Aegean to pursue a complementary
high margin business with global growth opportunities, while
simultaneously enabling the group to continue the optimization of
its global asset base and infrastructure. The combination of these
two companies creates a leading service provider to the maritime
industry that not only supplies the fuel that enables world trade,
but now with H.E.C., cares for the waste created by that trade and
in doing so, safeguards our environment.”
Dimitris Melisanidis, founder of both Aegean and
H.E.C., stated, “The combination of Aegean and H.E.C., two
companies that I have been involved with since their creation,
unites two businesses that are essential to shipping. Just as
Aegean has grown to become a worldwide brand synonymous with high
quality physical supply of bunker fuels, H.E.C.’s business has the
opportunity to expand globally, and become the market leader in the
provision of essential environmental services to vessels and ports.
I am happy to return as part of the group that will be the largest
shareholder of the combined company as we focus on improving the
overall health of the combined business and commit ourselves to a
greener world.”
Darren Laguea, Group CEO of H.E.C. Europe
Limited, said, “I have spent my entire career working in the
bunkering industry and port reception facility services. Our team
at H.E.C. is extremely excited to be joining Aegean’s global
network. We believe there are significant synergies to be gained
through the cooperation of our two companies and see exciting
growth prospects in our future.”
Subject to the closing of the acquisition,
Aegean, the Sellers and the Seller Owners have agreed to enter into
an investor rights agreement, pursuant to which, among other
things:
- the Sellers will agree not to sell, transfer or assign the
Consideration Shares for a period of at least one year (subject to
extension in certain circumstances) (the “Lock-up Period”);
- effective upon closing of the acquisition and for so long as
the Sellers, the Seller Owners, and their controlled affiliates
collectively beneficially own at least 25% of the issued and
outstanding voting stock of Aegean, (i) the Sellers, acting
unanimously, will have the right to designate two nominees for
appointment or election to the board of directors of Aegean (the
“Aegean Board”) and recommend one nominee (who shall be
independent) for appointment or election to the Aegean Board; (ii)
the Sellers, the Seller Owners and their controlled affiliates
shall vote all Aegean shares beneficially owned by them in
accordance with the recommendations of the Aegean Board with
respect to the appointment and removal of directors; and (iii) the
Sellers, the Seller Owners and their controlled affiliates shall
not in the aggregate acquire beneficial ownership in excess of 40%
of the issued and outstanding share capital of Aegean (subject to
certain exceptions);
- Aegean will agree to register for resale the Consideration
Shares upon request of the Sellers, subject to the expiration of
the Lock-up Period; and
- the Sellers, the Seller Owners and their controlled affiliates
will agree not to compete with the HEC Group for a period of 24
months.
In addition, Aegean expects to appoint one
additional independent director to the Aegean Board, effective as
of the closing of the acquisition, creating an eight member Board
of Directors.
The four new board members expected to be
appointed at the closing are Demetrios Diakolios (a new independent
director to be appointed by Aegean’s existing board members),
George Melisanidis and Darren Laguea (the two nominees expected to
be designated by the Sellers) and Alexis Rodopoulos (an independent
director expected to be nominated by the Sellers and acceptable to
Aegean).
The closing of the acquisition is subject to the
satisfaction or waiver of customary closing conditions.
The Company will hold a conference call on
Wednesday, February 21, 2018 at 10:00 AM EST to discuss the
transaction.
Conference Call Details
Participants should dial into the call 10
minutes before the scheduled time using the following numbers: +1
(866) 819-7111 (from the U.S.), 0(800) 953-0329 (from the U.K.) or
(+44) (0) 1452 542 301 (Standard International Dial In). Please
request "Aegean" from the operator.
A telephonic replay of the conference call
will be available until Wednesday, February 28, 2018. The United
States replay number is +1 (866) 247-4222; from the U.K. 0(800)
953-1533; the standard international replay number is (+44) (0)
1452 550 000 and the access code required for the replay is:
88442018.
Live Audio Webcast and
Slides
In parallel with the conference call, there will
also be a live audio webcast as well as slides for use with the
conference call. These can be accessed, and will be archived, on
the Investor Relations section of the Company’s website at
http://aegeanmarine.gcs-web.com/events-and-presentations/events.
Participants in the live webcast should register on the website
approximately 10 minutes prior to the start of the call.
Advisors
Seward & Kissel LLP and Ince & Co LLP
are serving as legal counsel to Aegean in connection with the
acquisition and Jefferies LLC is serving as financial advisor to
Aegean. Arnold & Porter is serving as legal counsel to the
Special Independent Committee and Clarksons Platou Securities is
serving as financial advisor to the Special Independent
Committee.
AXIA Capital Markets LLC is serving as financial
advisor to H.E.C. in connection with the transaction. AB Management
LLC and Orrick, Herrington & Sutcliffe (UK) LLP are serving as
legal counsels to the Sellers.
The description of the acquisition contained
herein is only a summary and is qualified in its entirety by
reference to the Share Purchase Agreement relating to the
acquisition, a copy of which will be filed by the Company with the
U.S. Securities and Exchange Commission as an exhibit to a Report
of Foreign Private Issuer on Form 6-K.
About Aegean Marine Petroleum Network
Inc.
Aegean Marine Petroleum Network Inc. is an
international marine fuel logistics company that markets and
physically supplies refined marine fuel and lubricants to ships in
port and at sea. The Company procures product from various sources
(such as refineries, oil producers, and traders) and resells it to
a diverse group of customers across all major commercial shipping
sectors and leading cruise lines. Currently, Aegean has a global
presence in more than 30 markets and a team of professionals ready
to serve its customers wherever they are around the globe. For
additional information please visit: www.ampni.com.
About the HEC
Group
The HEC Group is a leading environmental company
active in the treatment of maritime and offshore waste, using both
chemical and mechanical technologies, in order to support vessel
and terminal operators, as well as various governmental and
regulatory bodies and port authorities. The vision of the HEC Group
is to create a dynamic global network (Global Green Ports) that
will become one of the largest international reception facilities
networks worldwide. H.E.C., through its affiliates, provides its
services to some of the largest international shipping and oil and
gas companies. The HEC Group operates in a highly regulated and
legislation driven market. Treatment of marine waste is mandatory
with regulations applying to all vessels prohibiting the dumping of
vessel-generated waste at sea. The waste treatment process takes
place both in the HEC Group’s modern land-based facilities and in
their floating facilities. For additional information please visit:
www.hec.gr
Cautionary Statement Regarding
Forward-Looking Statements
Matters discussed in this press release may
constitute forward-looking statements. The Private Securities
Litigation Reform Act of 1995 provides safe harbor protections for
forward-looking statements in order to encourage companies to
provide prospective information about their business.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements, which are other than
statements of historical facts.
This press release contains certain estimated
and forward-looking non-GAAP financial measures with respect to the
HEC Group, such as estimated and projected Earnings Before
Interest, Income Taxes, Depreciation and Amortization (“EBITDA”).
Aegean has not provided a reconciliation of these measures to the
most directly comparable GAAP measure because financial information
that is necessary for the reconciliation is not available.
The Company desires to take advantage of the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995 and is including this cautionary statement in
connection with this safe harbor legislation. The words "believe,"
"intend," "will," "anticipate," "estimate," "project," "forecast,"
"plan," "potential," "may," "should," "expect" and similar
expressions identify forward-looking statements. The
forward-looking statements in this press release are based upon
various assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, Company management's
examination of historical operating trends, data contained in the
Company's records and other data available from third parties.
Although the Company believes that these assumptions were
reasonable when made, because these assumptions are inherently
subject to significant uncertainties and contingencies that are
difficult or impossible to predict and are beyond the Company's
control, the Company cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections.
In addition to these important factors, other
important factors that, in the Company's view, could cause actual
results to differ materially from those discussed in the
forward-looking statements include the Company’s ability to
successfully complete the proposed acquisition on anticipated terms
and timing, unforeseen liabilities, future capital expenditures,
revenues, expenses, earnings, synergies, economic performance,
indebtedness, financial condition, losses, future prospects,
business and management strategies for the management, expansion
and growth of the new combined company’s operations and other
conditions to the completion of the acquisition, risks relating to
the integration of H.E.C.’s operations and the possibility that the
anticipated synergies and other benefits of the proposed
acquisition will not be realized or will not be realized within the
expected timeframe, the outcome of any legal proceedings related to
the acquisition, the Company's ability to manage growth, the
Company's ability to maintain its business in light of its proposed
business and location expansion or other changes in its business,
the Company's ability to obtain double hull secondhand bunkering
tankers, the outcome of legal, tax or regulatory proceedings to
which the Company may become a party, adverse conditions in the
shipping or the marine fuel supply industries, the Company's
ability to retain its key suppliers and key customers, material
disruptions in the availability or supply of crude oil or refined
petroleum products, changes in the market price of petroleum,
including the volatility of spot pricing, increased levels of
competition, compliance or lack of compliance with various
environmental and other applicable laws and regulations, the
Company's ability to collect accounts receivable, changes in the
political, economic or regulatory conditions in the markets in
which the Company operates, and the world in general, the Company's
failure to hedge certain financial risks associated with its
business, the Company's ability to maintain its current tax
treatments and its failure to comply with restrictions in its
credit agreements and other factors. Please see the Company's
filings with the U.S. Securities and Exchange Commission for a more
complete discussion of these and other risks and uncertainties.
CONTACTS:Aegean Marine
Petroleum Network Inc.Tel. +1-212-430-1098Email:
investor@ampni.com
Investor Relations / Media AdvisorNicolas
Bornozis / Daniela GuerreroCapital Link, Inc.Tel.
+1-212-661-7566Email: aegean@capitallink.com