IPO Preview: World Point Terminals, LP

Aug. 8.13 | About: World Point (WPT)

Based in St. Louis, Mo., World Point Terminals, LP (NYSE:WPT) scheduled an $176 million IPO with a market capitalization of $660 million at a price range midpoint of $20 for Friday, Aug. 9, 2013. Nine other IPOs were scheduled for the week of Aug. 5. The full IPO calendar can be found at IPOpremium.

  • S-1 filed Aug. 1, 2013
  • Manager, Joint Managers: BofA Merrill
  • Co-Managers: Credit Suisse, Citigroup, Stifel, BNP PARIBAS, Stephens, Wedbush


WPT is a limited partnership sponsored by secretive, privately held Apex Oil, a $5 billion in revenue company also based in St. Louis, Mo. WPT provides oil storage facilities. WPT's growth plan appears to be pretty much limited to other oil storage facilities that can be funneled in by Apex. WPT's post-IPO capacity will be 12.8 million barrels. Post-IPO, Apex will still own six refined product and crude oil storage terminals in the East Coast and Gulf Coast regions, with an aggregate available storage capacity of 7.8 million barrels.


WPT has a relatively high price to book. Public shareholders receive no incentive distributions rights, which is a negative. Most limited partnerships share incentive distribution rights with public shareholders.

Valuation Ratios


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in IPO

World Point Terminals, LP






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Neutral on the WPT IPO, lacks growth potential.

To put the conclusions and observations in context, the following is reorganized, edited, and summarized from the full S-1 referenced above:


WPT is a fee-based, growth-oriented Delaware limited partnership recently formed to own, operate, develop and acquire terminals and other assets relating to the storage of light refined products, heavy refined products, and crude oil. Storage terminals are strategically located in the East Coast, Gulf Coast, and Midwest regions of the United States and, as of May 31, 2013, had a combined available storage capacity of 12.4 million barrels. At the closing of this offering it will have 12.8 million barrels of available storage capacity.

Since Jan. 1, 2013, WPT completed construction of and placed into service 0.2 million barrels of available storage capacity at existing facilities and has acquired -- or will acquire prior to the closing of this offering -- an additional 1.4 million barrels of available storage capacity, increasing storage capacity since Dec. 31, 2012, by approximately 14%. Most of the terminal facilities are strategically located on major waterways, providing easy ship or barge access for the movement of petroleum products, and have truck racks with efficient loading logistics. Several of its terminal facilities also have rail or pipeline access.

For the years ended Dec. 31, 2011, and 2012, WPT generated 86% of revenue from storage services fees. For the three months ended March 31, 2012, and 2013, it generated 84% of revenue from these fees.

Sponsor Generated Revenues

For the year ended Dec. 31, 2012, and the three months ended March 31, 2013, revenues of 28% and 34%, respectively, were derived from Apex, the sponsor. Formed in 1932, Apex is a distribution and marketing company controlled by the controlling shareholders that supplies, distributes and markets refined petroleum products to refiners, wholesalers, distributors, marketers and industrial and commercial end users throughout the United States and international markets.

For the three years ended Sept. 30, 2012, Apex averaged annual revenue in excess of $5.0 billion and sales in excess of 50 million barrels of refined products. WPT's terminals provide critical logistics services that support Apex's distribution and marketing operations. Apex also owns six refined product and crude oil storage terminals in the East Coast and Gulf Coast regions, with an aggregate available storage capacity of 7.8 million barrels.

Under Contract

As of May 31, 2013, 93% of available storage capacity was under contract. During the five years ended Dec. 31, 2012, more than 95% of available storage capacity was under contract. The top 10 customers (including Apex) represented over 84% of revenue for 2012, and for the first three months of 2013 have used WPT's services for an average of approximately ten years. As of May 31, 2013, 93% of available storage capacity was under contract. The top 10 customers include several major oil and natural gas companies, including Phillips 66 Company, Sunoco, and ExxonMobil.


One of WPT's principal attributes is its relationship with Apex, which is controlled by Paul A. Novelly and members of his family. 28% of WPT's revenue for 2012 was derived from Apex. Aprex is a secretive private company based in St. Louis, Mo. At the closing of this offering, the controlling shareholders will indirectly control the general partner, and the sponsors will own all incentive distribution rights.

Organization Chart

See here.

Incentive Distribution Rights

None to public shareholders (this is a negative).

Minimum Distribution

WPT expects to make a minimum distribution of $1.20 per year, which is 6% at the price range midpoint of $20.

Use of Proceeds

WPT expects to receive $70 million from its IPO from the sale of 3.9 million shares. Shareholders expect to sell 4.9 million shares, or 56% of the IPO:

  • pay transaction expenses related to the new revolving credit facility in the amount of $1.6 million;
  • distribute to the selling unitholder $29.9 million, the majority of which is to reimburse the selling unitholder for costs related to the acquisition or improvement of assets that the selling unitholder will contribute to WPT;
  • repay indebtedness owed to a commercial bank under a term loan of $8.1 million;
  • repay indebtedness owed to a related party of $14.1 million;
  • repay existing payables of $4.3 million; and
  • provide working capital of $12.0 million.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: This WPT IPO report is based on a reading and analysis of WPT's S-1 filing, which can be found here, and a separate, independent analysis by IPOdesktop.com. There are no unattributed direct quotes in this article.