Castleton Commodities International LLC (“CCI” or the “Company”) today announced that it has reached a definitive agreement to acquire Morgan Stanley’s Global Oil Merchanting business, one of the world’s leading physical oil and products franchises.
The purchase price of the transaction is not being disclosed. The all-cash transaction is expected to close in the second half of 2015 and among other conditions, it is subject to regulatory approvals in the U.S., the E.U. and certain other jurisdictions.
The acquisition of Morgan Stanley’s Global Oil Merchanting business is an excellent strategic fit for CCI and it aligns well with our goal of becoming a top-tier, global multi-commodity merchant,” said William C. Reed II, President and Chief Executive Officer of CCI. “The business is a natural extension of our existing physical oil and products platform and is highly complementary to CCI’s strong position in North American physical power, natural gas, natural gas liquids, and financial crude trading. Furthermore, we are excited about adding a successful and seasoned group of professionals to our team to further drive our growth initiatives.
Tom Simpson and Fabrizio Zichichi from Morgan Stanley’s Global Oil Merchanting business will lead CCI’s global physical oil and products platform. Messrs. Simpson and Zichichi will work closely with Mr. Reed and CCI’s business leaders to ensure a seamless transition.
Morgan Stanley’s Oil Merchanting business is a leading global oil and products platform active in the light ends, distillates, crude and wet freight markets. Over the past five years, the unit has traded approximately two million barrels of oil and oil products per day. The business also has 45 storage leases, predominantly in the US and Europe, totaling approximately 30 million barrels.
CCI’s origins date back to 1997 when the Company was the wholly-owned energy subsidiary of the Louis Dreyfus Group, one of the world’s leading commodities companies with a 160-year history. In 2006, Highbridge Capital Management made a significant minority equity investment in the Louis Dreyfus Group’s energy trading subsidiary, thus forming Louis Dreyfus Highbridge Energy LLC (LDHE). Following the 2012 purchase of LDHE by CCI management and a group of private investors led by Glenn Dubin, Paul Tudor Jones, Timothy Barakett, and Paul Fribourg, CCI has significantly transformed itself and expanded beyond its historical North American focus by investing in its commodity infrastructure activities and extending the Company’s reach to almost all commodity markets globally.
BNP Paribas is providing an aggregate $3.5 billion fully committed financing package in support of CCI’s existing business and the acquisition of Morgan Stanley’s Global Oil Merchanting business. This committed financing, which will subsequently be syndicated, will replace and upsize CCI’s existing $1.6 billion working capital facility.
BNP Paribas acted as Lead Arranger, Administrative Agent and Collateral Agent for CCI’s committed financing package. The Company was also advised by Credit Suisse and Citi. Sullivan & Cromwell served as legal counsel to CCI and Stroock & Stroock & Lavan served as financing counsel.
ABOUT CASTLETON COMMODITIES INTERNATIONAL LLC
CCI is a global commodities merchant with an integrated set of operations consisting of physical and financial commodities trading and the ownership, operation, and development of commodities-related upstream and infrastructure assets. The Company markets a broad range of physical commodities including natural gas, natural gas liquids, refined products, crude oil, fuel oil, freight, petrochemicals, electric power, coal, metals and financial instruments related to commodities. CCI is headquartered in Stamford, Connecticut with offices in Houston, Texas; Calgary, Canada; Geneva, Switzerland; London, United Kingdom; Shanghai, China; Singapore; and Montevideo, Uruguay.
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