Shareholder approval notched in Macquarie-WCA deal

A $526m offer for WCA Waste Corp by Macquarie Infrastructure Partners II was given the stakeholder go-ahead, helping Macquarie Group expand its presence in the US waste management space. The acquisition is expected to be finalised by the end of the first quarter.

A transaction giving Macquarie Group possession of WCA Waste Corporation, a waste management operation with a considerable profile in the US Midwest and South, has won shareholder approval, according to WCA.

In December, Macquarie, via its Macquarie Infrastructure Partners II (MIP II) investment fund, offered $526 million, or $6.50 per share, for Houston-headquartered WCA. The price amounted to a 30 percent premium; WCA was trading at $4.99 on the Nasdaq Composite before the Macquarie acquisition was made public.

WCA has a customer base nearing 450,000, spread throughout Alabama, Arkansas, Colorado, Florida, Kansas, Missouri, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas. Tom Fatjo, senior vice president in charge of WCA, did not return a voicemail message seeking additional comment. WCA indicated the transaction should close by the end of the first quarter.

Privatisation can help a waste management company, like WCA, gain capital essential to growing and developing its business without scrutiny from Wall Street. Building a landfill, for example, is a long-term expenditure that can eat into short-term financial performance for a publicly-traded company, negatively impacting valuation and driving down stock price.

Long considered an untraditional infrastructure investment, waste management has become a popular venture for the asset class. Within the infrastructure industry, garbage disposal is now widely-viewed as an attractive asset because of its reputation as a business with an inelastic demand and its low-correlation to the prevailing economic climate.

For Sydney, Australia-based Macquarie, WCA marked its second buy in the waste management sector. In 2008, Macquarie Infrastructure Partners I, the predecessor to MIP II, teamed with Wall Street firm Goldman Sachs to take ownership of Waste Industries, a Raleigh, North Carolina-headquartered concern.