Macquarie Infrastructure and Real Assets is poised to take over Australia-based waste management and recycling firm Bingo Industries, in what is poised to be one the country’s largest infrastructure deals of the year.
Bingo confirmed it had entered into a scheme of arrangement with the world’s largest infrastructure manager, in a transaction giving it a A$2.3 billion ($1.8 billion; €1.5 billion) equity valuation and a A$2.6 billion enterprise value.
According to the terms of the scheme, Bingo shareholders will have the option to choose between A$3.45 cash per share or a mixed cash and unlisted scrip alternative at a lower A$3.30 per share. The cash consideration represents a 33 percent premium to the company’s one-month volume weighted average price to 18 January. It also represents an EBITDA multiple of 19.5x for the year up to December 2020.
The company stated its board had unanimously recommended the scheme, which is expected to be implemented following a shareholder vote in July.
Australian fund manager CPE Capital had previously led the takeover bid in conjunction with a group of co-investors, which included MIRA. That proposal, announced in January, offered Bingo shareholders A$3.50 per share as part of a non-binding, indicative bid. CPE Capital, however, is no longer participating in the transaction.
CPE Capital has been contacted for comment but could not be reached in time for publication.
In a February operational briefing to shareholders, Macquarie Group revealed MIRA had A$25.7 billion to deploy. In March, it was announced MIRA had acquired Australia-based fibre business Vocus for A$3.5 billion.
Head of MIRA Asia-Pacific Frank Kwok said the fund manager’s experience with recycling and waste management businesses globally would help Bingo’s continued growth: “We believe the proposal we have developed in collaboration with Bingo will deliver real value for Bingo’s shareholders. The proposal recognises Bingo’s achievements and position in the marketplace, with a strong asset base and highly capable management team.”
The waste management sector has been under the spotlight recently, thanks to the €13 billion deal for waste and water management giant Suez. Our Deal of the Year, Global in the 2020 Infrastructure Investor awards went to KKR’s £4.2 billion ($5.8 billion; €4.8 billion) acquisition of UK-based energy-from-waste company Viridor, a transaction which picked up three other gongs. And in March, we published our Deep Dive on the UK’s EfW sector.