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Compact case
Case
-
Reference no. IMD-7-2126
Published by: Institute for Management Development (IMD)
Originally published in: 2019
Version: 18.09.2019
Revision date: 14-Nov-2019
Length: 1 pages
Data source: Published sources

Abstract

This is part of a case series. OW Bunker, founded in 1953, was a Danish marine fuel ('bunker') company. It was Denmark's third largest company (measured on revenue) and the world's largest bunker supplier until its collapse on 7 November 2014. Similar to many other commodity traders, OW Bunker's business model was about buying the physical oil in order to sell at a later stage ('physical distribution') OR to simply act as a broker between the physical supplier and the ship-owner ('re-selling'). In essence, the business can be characterized as a high volume/high revenue/small margin business, wherefore scale and risk management are key parameters for success. In 2007, 93.5% of the company were acquired by leading Scandinavian private equity company, Altor, and in the following years, the company grew significantly, and sales volume grew nearly 100%, from 15 million ton in 2007 to 29.6 million ton in 2013, at which time an exit was decided upon. When a private sales transaction did not succeed, Altor decided to pursuit an exit through an IPO, which with a Market Cap of about USD900 million, became the largest IPO in Denmark in many years.

Time period

The events covered by this case took place in March 28th, 2014 - November 7th, 2014.

Geographical setting

Country:
Denmark

Featured company

OW Bunker
Employees:
501-1000
Turnover:
USD 900 million
Industry:
Oil and gas

About

Abstract

This is part of a case series. OW Bunker, founded in 1953, was a Danish marine fuel ('bunker') company. It was Denmark's third largest company (measured on revenue) and the world's largest bunker supplier until its collapse on 7 November 2014. Similar to many other commodity traders, OW Bunker's business model was about buying the physical oil in order to sell at a later stage ('physical distribution') OR to simply act as a broker between the physical supplier and the ship-owner ('re-selling'). In essence, the business can be characterized as a high volume/high revenue/small margin business, wherefore scale and risk management are key parameters for success. In 2007, 93.5% of the company were acquired by leading Scandinavian private equity company, Altor, and in the following years, the company grew significantly, and sales volume grew nearly 100%, from 15 million ton in 2007 to 29.6 million ton in 2013, at which time an exit was decided upon. When a private sales transaction did not succeed, Altor decided to pursuit an exit through an IPO, which with a Market Cap of about USD900 million, became the largest IPO in Denmark in many years.

Settings

Time period

The events covered by this case took place in March 28th, 2014 - November 7th, 2014.

Geographical setting

Country:
Denmark

Featured company

OW Bunker
Employees:
501-1000
Turnover:
USD 900 million
Industry:
Oil and gas

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