Kinder Morgan Energy Partners LP (NYSE: KMP) agreed to acquire two private equity-backed shipping companies for $962 million in cash, underscoring the continuous consolidation taking place among tankers.
The targets, American Petroleum Tankers (APT) and State Class Tankers (SCT), were founded and expanded by the Blackstone Group (NYSE: BX) and Cerberus Capital Management. Both operate as marine transporters of crude oil.
APT’s assets consist of a fleet made up of five tankers that are able to hold roughly 330,000 barrels of cargo. SCT, meanwhile, is still in development. Houston-based Kinder Morgan will invest about $214 million to complete the construction of four tankers, each with 330,000 barrels of cargo capacity, by 2015 and 2016.
The deal is just one of many tanker acquisitions that took place over the course of 2013, as several big-name investors and buyers look to the sector, including Wilbur Ross. The chairman and CEO of WL Ross & Co. LLC, who has made large investments in several niche carriers over the last couple of years, expects private equity investment in capital-intensive marine transportation to double by the end of 2014 from the current level of $3 billion in equity investment and $4 billion in distressed debt.
For more coverage on PE investments in shipping companies, see "Littlejohn Invests in Consolidating Shipping Industry" and "Marine Shippers Aim to Stay Afloat."