Cleanaway settles for $500 million in Suez assets after Veolia merger deal
Cleanaway Waste provided an update on its proposal to acquire Suez Group’s Australian recycling and recovery business, in light of a subsequent takeover event by Veolia Environnement.
Cleanaway had previously advised the market that its proposed acquisition could be terminated where there is another in‐principle agreement for a takeover of Suez. However, in such a case, Cleanaway would acquire a portfolio of strategic post-collection assets in Sydney, including two landfills and five transfer stations for $501 million.
Cleanaway was informed by Suez that it has reached an agreement with Veolia for a takeover. Cleanaway now expects that its takeover proposal will be terminated on, or prior to 6 May 2021, and that the acquisition of the Sydney assets will proceed.
The key highlights of the Sydney Assets acquisition include:
Suez’s putrescible and inert landfills and 5 transfer stations located across the greater Sydney basin
The acquisition is subject to ACCC approval, no material adverse change, transfer of certain contracts and a change of control of Suez S.A.
At Cleanaway’s forecast pro forma throughput rates, the landfills are expected to have in excess of 15 years of available airspace, whilst the leading transfer station network will service the Sydney region for the foreseeable future, including Cleanaway’s potential Energy from Waste facility in Western Sydney
The inert landfill at Kemps Creek is well-positioned to benefit from major infrastructure projects
The assets enhance and complement Cleanaway’s existing footprint, and deliver Cleanaway an immediate post collections solution for the Sydney region to internalise its waste
The acquisition of the assets is expected to deliver attractive financial returns including pro forma EPSA accretion to FY20
The assets include the following:
Lucas Heights and Kemps Creek landfill operations with approximately 9.9 million cubic metres and 8.7 million cubic metres of available airspace across putrescible and dry/restricted waste streams, respectively
Transfer stations in Auburn, Artarmon, Belrose, Rockdale and Ryde with waste processing capacity and capabilities In CY20, the Sydney Assets generated net revenue of $193.1 million3 and normalised EBITDA of $72.9 million .
Based on the expected timeline for completion of the takeover of Suez by Veolia, the acquisition is expected to complete in the second quarter of CY22.