Consolidation name of game in waste sector
Consolidation of the waste services sector is gathering pace with the third deal launched within a year, and a fourth in the offing with the private equity owner of Global Renewables said to be testing the water for a sale.
Indian group Ramky Environment has agreed to acquire the privately owned Enviropacific Services through its Singaporean arm.
While only modest - Enviropacific has revenue of $67 million, with the sale price estimated at $45 million - it is expected to be used as a vehicle by the Indian owners to establish a stronger position in Australia and the region.
Enviropacific's revenues are expected to rise to around $100 million this financial year with the prospect of strong growth offshore prompting the sale, as the original founders sought access to a bigger balance sheet to back their growth ambitions.
Enviropacific has established a speciality in the area of land remediation, which has helped to fuel its growth.
The Enviropacific deal comes as private equity group Ironbridge is said to be seeking buyers for its Global Renewables business, which could be worth as much as $150 million. Global Renewables handles an estimated 220,000 tonnes of waste annually at a plant at Eastern Creek, in Sydney's west.
One of the industry's main concerns, Transpacific, remains hamstrung with a high level of debt and limited volume growth.
"Enviropacific provides Ramky ... with a strong platform to drive substantial growth in both Australia and internationally," said Swee Goh, the chief executive of Ramky Enviro Engineers, the arm of the group taking control of Enviropacific.
The acquisition follows Tox-free Solutions paying $85 million for Wanless (around 7 times earnings) and CK Infrastructure's $US500 million purchase of Envirowaste from Ironbridge, which was bought on a multiple around 10-times.
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