Looking to expand its presence in one of the most volatile markets for the past year, Tullet Prebon announced that it has acquired independent brokerage MOAB Oil. The firm has been actively engaged in the energy markets with gasoline, crude oil, ethanol, distillates, weather and power derivatives.
The acquisition cost $12.3 million (£7.8 million) plus an amount equal to the working capital of the business. The deal will be financed from the company's existing cash resources.
MOAB has been in business for over a decade with 23 brokers based in Connecticut. The target company generated revenues totaling $23.7 million (14.4 million) last year.
There is also a deferred contingent consideration totaling $14.3 million (£9.1 million), dependent upon the performance of the business over a five year period.
MOAB has long-established relationships with major oil companies, gasoline blenders, oil trading divisions of investment banks and smaller domestic trading firms. Utilizing proprietary models and the latest technology it provides its clients with insights on trends, evolving regulations and trading economics which affect their markets.
The CEO of Tullett Prebon, John Phizackerley, said, "The acquisition of MOAB is consistent with our strategic aim to build our global energy and commodities franchise. MOAB is an excellent fit with our existing crude oil and energy broking activities. It complements our recent acquisition of PVM and further establishes our leading position in the energy sector."
The President of MOAB, Kenneth Utting, added, "In Tullett Prebon, we have found an ideal partner for MOAB. Together we will be able to expand and enhance our valuable franchise, extend our reach geographically, reach more customers and provide an even better quality of input on Market Depth and colour and service in Execution of oil trades."
