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Aegean: HEC acquisition ‘driven by intense competition’

26 Feb 2018

The move to acquire maritime and offshore waste treatment firm H.E.C. Europe Limited (HEC) has been “driven by intense competition”, says the President of New York-listed bunkering firm Aegean Marine Petroleum Network (ANW).

“The strategic decision to buy HEC and align Aegean into this new environmental sector is not going to diminish our focus on writing the core business and optimsing the core business,” Jonathan Mcilroy said in his latest earnings conference call.

“But one thing with this is that, as we've said, the bunker market is very mature, it's overpopulated, it's ultra-competitive, and we're looking at a two-year window prior to 2020 where we think that these factors are going to remain prevalent in the market.

“And we don't want to be playing defense for the next two years in anticipation of 2020.”

The strategy behind ANW’s acquisition of HEC lies in the potential synergy of both firms. HEC is responsible for performing treatment on oily waste where it sells the recovered oil to clients in the open market.

The company will be able to leverage on Aegean’s client base to provide waste disposal services, with Aegean’s existing relationships providing additional recycled oil sales opportunities to the former.

The development allows HEC to redeploy or repurpose underutilised Aegean ships, lowering potential capex requirements for ANW, and the consolidation of offices worldwide could reduce corporate expenses for both entities.

HEC is also able to leverage on Aegean’s existing team and port relationships to expedite market expansion.

Overall, the development is supposed to help diversify ANW’s current business model and reduce its dependency on bunker-market related sales.

ANW has forecast a $28.2 million net loss for its fourth quarter of 2017 (Q4 2017) results.

Related: Aegean in $367 million acquisition of port reception facilities services group
Related: Aegean forecasts a $28.2 million net loss for Q4 2017

Photo: Aegean Marine Petroleum Network
Published: 26 February, 2018

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