TradeWinds: Shipbroker Poten &Partners sharpensM&A focus after BGCPartners deal
16 November 2018:
Poten & Partners has set its sights firmly on growth and consolidation in the shipbroking market following its takeover by
financial and technology heavyweight BGC Partners. BGC president Shaun Lynn and Poten chief executive Steven Garten closed the deal yesterday after 18 months of discussions over a potential transaction, the told TradeWinds today.
Lynn said his company has been openly looking to expand its commodities, energy and technology activities and saw Poten as an amazing opportunity to grow in the sector. “From our perspective, we are not a PE [private equity] firm. We are investors in the business,” he said. “We are not looking to buy a company and then flip it or sell it — we are looking to invest and grow and build that platform.” Garten explained that BGC has a history of supporting the growth of companies after taking them over and Poten now had the resources to execute merger and acquisition openings. “We have had approaches in the past for companies who were looking to be acquired. Now we have a platform to pursue them,” he explained. “We see BGC as the perfect partner for us to not only grow in our core business and to improve our technology but also to help us with consolidation in the industry,” he added. BGC has not disclosed how much it has paid for Poten, which booked revenue of $60m in 2017. Global growth Garten sees opportunities for consolidation, particularly on the tanker side of the business. He also highlighted growth of 25% or more in LNG demand during the next fi ve years, which would be followed by a corresponding increase in the need for shipping. “We need to be out there growing our broking desks to cover that demand and improve our technology to better serve our clients,” Garten said.
Expansion of Poten’s small merger and acquisitions division is also a possibility, while geographically it will “look at the entire world where we can serve our clients”, Garten added. “We are looking to expand in Houston. We are looking to expand our footprint in the Far East and Europe as well,” he said. Poten has of fi ces in New York, London Singapore, Houston, Athens, Guangzhou and Perth. However, new locations are a possibility now that it is part of a larger group, Lynn said. “Across our 30 destinations that we have offices in, you could quite easily see Poten & Partners having the opportunity to grow and build in any one of those centres,” Lynn explained. While BGC has taken full control of Poten 11 years after chairman Michael Tusiani — a
strong supporter of this transaction — sold shares to employees, the Poten name will remain and none of the 180-plus staff will be leaving. The purchase is BGC’s first in pure shipbroking, but it does have maritime exposure via its control of dry freight business GFI. Lynn sees the two businesses as complimentary and does not rule out a merger down the line, stressing nothing had yet been decided just a day after the Poten deal was signed. “The guys at GFI are very excited as it gives them the opportunity to have a linking relationship and work with Poten,” he said.
Bigger data
Both executives voiced ambitions to develop further technology, an area in which BGC has invested over $1.7bn in the past 15 years. “We think using that leverage with Poten can take us to the next level,” Lynn said. Poten has a number of established multi- client reports driven by its databases anddata services, including its LNG world markets publication and asphalt pricing
service.
“We need to invest in technology and improve and grow our databases and that will certainly provide us with a platform to be able to expand and add additional products,” Garten said. “We are presently in the LNG, LPG and asphalt side with our data products and we will be expanding that further in the future.”
