Fairplay: BGC Partners’ takeover of Poten & Partners taps on oil andgas recovery

Abdullah Alazzaz

18 November 2018: 

BGC Partners, Inc, has acquired US tanker brokerage Poten & Partners amid a recovery in the oil and gas markets. Originally part of the larger Cantor Fitzgerald group, BGC took its name from its founder, Bernard Gerald Cantor, who in 1945 founded a brokerage focused on equities and financial products. BGC was incorporated in 2004 after Cantor Fitzgerald divested its voice brokerage business. Poten & Partners, provides brokerage and consultancy services in the tanker, liquefied natural gas
(LNG), and liquefied petroleum (LPG) markets, while previously, BGC’s only presence in the shipping sector was through its acquisition of GFI in 2016. GFI is active in forward freight-agreement trades in the dry and wet sector, as well as physical dry
cargo fixtures. Founded more than 80 years ago, Poten has 170 employees in offices in New York, London, Singapore, Houston, Athens, Guangzhou, and Perth. BGC’s takeover of Poten & Partners contrasts with the mergers and acquisitions in the shipbroking sector in 2014. That year, Clarksons acquired RS Platou, Braemar Shipping Services acquired ACM Shipping, while
Howe Robinson took over the shipping unit of ICAP. While the earlier unions sought to form bigger shipbroking shops, it appears that BGC is tapping on the current rebound in oil and gas prices, as well as the long-term growth prospects in natural gas
demand. BGC Partners president Shaun D Lynn said, “The addition of physical LNG, LPG, and tanker brokerage and energy consulting capabilities will allow BGC to expand its operations in the oil, gas, and shipping sectors. Poten’s access to market intelligence and its highly regarded price reporting and analytical products, including LNG, LPG, and asphalt, will also add to our existing energy and commodities suite of market data solutions.” Spot LNG shipping rates have topped an all-time high of USD200,000/day, as a small number of free vessels have made it a shipowners’ market. Demand for cleaner energy is driving LNG consumption and the Baltic Exchange plans to launch an LNG freight index due to growing spot LNG trades.
Shell said in a recent report that global LNG demand grew by a market-defying 29 million tonnes to 293 million tonnes in 2017, and LNG buyers continue to call for greater flexibility with shorter and smaller contracts. Last year, a record of 1,100 spot LNG cargoes were sold, with the growth coming mostly from new supply from Australia and the United States. Poten & Partners generated revenues of approximately USD60 million in 2017. The transaction is expected to be immediately accretive. In addition to brokerage, Poten provides value-added services including commercial advisory, technical consulting, project due diligence, and multi-client reports. Poten & Partners Steven M Garten, chairman and chief executive officer of Poten & Partners, said,
“We are very excited to be part of BGC and feel BGC is uniquely positioned to support us in our next stage of growth. The combination of BGC and Poten will enable us to accelerate this, both organically and through targeted acquisitions.”
Poten will be recorded as part of BGC’s energy and commodities business. Further details of the transaction were not disclosed.
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