Goldman, Macquarie in $544m garbage deal

The frequent infrastructure investors are backing the management-led buyout of Waste Industries USA, a refuse and recycling company with operations in North Carolina, South Carolina, Virginia, Georgia and Tennessee.

Macquarie Infrastructure Partners and Goldman Sachs are backing a $544 million (€378 million), management-led take private of Waste Industries USA. Specific details were not disclosed as to how much equity Macquarie and Goldman will contribute to the buyout of the refuse and recycling company, which is being led by the company’s founder and chairman, Lonnie Poole, and its president and chief executive, Jim Perry.

The consortium already owns approximately 51 percent of the company’s common shares and in late October offered to buy the remaining shares at a price of $36.75 per share. Since then there have been “extensive negotiations” and the offer was revised to $38 per share, a 33 percent premium over Waste Industries' closing price prior to the initial take-private bid, according to a statement.

Subject to regulatory and shareholder approval, the deal is expected to close in the first half of 2008. A special committee appointed by Waste Industries to review the transaction received a fairness opinion from JPMorgan, and is receiving legal counsel from Robinson, Bradshaw & Hinson. The investor consortium is receiving financial advice from Macquarie Securities (USA) and Goldman Sachs and legal advice from Weil, Gotshal & Manges and Brooks Pierce McLendon Humphrey & Leonard.

Waste Industries is receiving legal advice from Wyrick Robbins Yates & Ponton.

Macquarie’s infrastructure arm recently agreed to take part in the $7.4 billion take-private of Puget Sound Energy, Washington State’s largest utility company, along with the Canada Pension Plan Investment Board and British Columbia Investment Management Corporation. Focussed on North American infrastructure investments, the Macquarie group’s portfolio also includes New England water utility Aquarion, Pittsburgh electric utility Duquesne Light, two Canadian port terminals and interests in four US toll roads.

Goldman Sachs last December had raised more than $6.5 billion for GS Infrastructure Partners, the firm’s first fund dedicated to making infrastructure investments in areas such as toll roads, airports, ports, gas water and electrical utilities. The Waste Industries investment, however, was made via GS Direct, an entity which uses the bank’s capital to invest in middle market transactions.