August 6, 2014 [OPIS] - Global private equity investment firm, Warburg Pincus, said on Monday that its liquids and bulk terminaling company affiliate, Zenith Energy, has agreed to lead a line-of-equity investment of up to $600 million to buy, build and operate terminals primarily in Latin America, Europe and Africa.
These expansion opportunities include the storage and logistics for crude oil, refined products, and petrochemicals. Warburg Pincus is joined by minority investors that include members of the management team and other individuals.
Zenith also will identify opportunities in logistics and distribution assets that support terminals, such as pipelines, truck racks and barges. Zenith is led by Chief Executive Officer Jeffrey R. Armstrong, who most recently served as the head of corporate strategy of Kinder Morgan.
From 2001 to 2012, Armstrong was the president of Kinder Morgan Terminals. During his tenure, KinderMorgan grew its terminal business from 12 terminals to 122 terminals and increased EBITDA from less than $50 million to more than $800 million.
“We look forward to working with Warburg Pincus as we develop and grow Zenith into a leading international terminaling company. The firm’s deep energy experience and large, global footprint will provide us with the support needed to take advantage of opportunities in the marketplace,” Armstrong said.
In June 2014, Zenith and Grupo Coremar announced the award of a contract for the construction on the first phase of a new, multi-product liquids terminal in Palermo, Colombia.
Zenith’s management also includes Chief Commercial and Legal Officer Jay Reynolds, who previously served as a managing director and member of the Board of Managers at Lukoil Pan Americas, and Chief Operations Officer, and the Head of Environmental, Health and Safety Glenn Sandor, who worked at GATX and Kinder Morgan for more than 25 years.
With headquarters in Houston, Zenith Energy is an international liquids and bulk terminaling company.
Zenith is pursuing opportunities to buy, build and operate terminals primarily in Latin America, Europe and Africa. The company is focused on the storage and distribution for petroleum, refined products, natural gas liquids and petrochemicals. The company also will identify opportunities in logistics and distribution assets that support terminals, such as pipelines, truck racks and barges.
Warburg Pincus has more than $39 billion in assets under management. The firm’s active portfolio of more than 120 companies is highly diversified by stage, sector and geography.
In July, Vopak said that it has cut back on its capital spending and will divest small terminals amid a challenging operating environment in the oversupplied tank storage market.
Vopak said that since 2013, the tank storage market has been adversely impacted by a substantial incremental supply of storage capacity as well as by legislative and geopolitical developments. This has resulted, mainly in Europe, in new market dynamics with different consequences for different product-market combinations and pressure on occupancy rates and pricing.
Additionally, the timing of new profitable expansion projects has become less apparent. As a result, Vopak’s financial outlook for 2014 is no longer fully aligned with the company’s longer-term growth ambitions as defined in the 2010-2012 period. Against this background, Vopak carried out the business review.
