BMO, Port of Galveston sign financial advisory agreement

Eric Zampol, one of the bankers on the deal, said ‘we’re contemplating a six-to-nine month process’ that would involve the usual two-step regiment of qualifying bidders and soliciting competitive bids. But the port is also open to negotiating individually with one bidder if an attractive enough offer is made.

The Port of Galveston in Texas and BMO Capital Markets have signed a letter hiring BMO as a financial advisor to the port on a potential public-private partnership to improve and expand its facilities.

BMO will bring to the deal two ex-Goldman Sachs investment bankers, managing director Jeff Holt and vice president Eric Zampol, according to a statement. BMO veteran Lyle McCoy, who heads the firm’s public sector and infrastructure banking group, will lead the deal team.

Zampol said the plan is to release a “teaser” outlining the investment opportunity to interested parties next week. Soon thereafter, they’ll send a detailed memo to parties who have signed confidentiality agreements with the port.

“We’re contemplating a six to nine month process,” Zampol said, adding that “we’ll let the market drive the process.”

The goal is to have a two-step competitive process of qualifying bidders and then asking select parties to submit detailed proposals. But at this point, the possibility of a bilateral negotiation with a select bidder who provides the most valuable proposition to the port is not out of the question.

“If we see the best offer on the table,” Zampol said, “we’re going to pursue it.”

Steve Cernak, the chief executive officer of the port, agreed, saying “we’re open to any suggestions”.

The port, which authorised Cernak to hire BMO in a 6-0 vote on Monday, cleared about $24 million in revenues last year, according to preliminary, unaudited figures.