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Private Equity firm Ironbridge will successfully exit its six-year investment in waste management company EnviroWaste in a deal with Cheung Kong Infrastructure Holdings.
The Hong Kong investor has signed a sale and purchase agreement to buy EnviroWaste for $490 million, plus $11 million of assumed debt.
The $501 million price represents a multiple of about 10 times EnviroWaste’s ebitda for the year to June 30, 2012, and is well above expectations previously speculated by market watchers.
Ironbridge originally acquired EnviroWaste from Fulton Hogan in April 2007, paying $365 million for the asset.
The company expanded under Ironbridge’s ownership and doubled its ebitda over the period. However, interest payments on debt used to fund the acquisition resulted in big bottom line losses.
Most recent accounts showed bank debt was $195 million as at June 30, with shareholder loans of a further $215.9 million also counted as liabilities.
The company booked a loss of $18.97 million for the year ended June 2012 despite earnings before interest and tax came of $32.15 million, up from $25.4 million in 2011.
EnviroWaste chairman Kim Ellis thanked the Ironbridge team of Julian Knights, Kerry McIntosh and Chris Aughton for their contribution to the business over the past six years.
“EnviroWaste is well placed to continue to provide superior service to customers and to expand its operations under the ownership of CKI,” he says in a statement.
Cheung Kong Infrastructure Holdings (CKI) is listed on the Stock Exchange of Hong Kong and is a member of the Cheung Kong Group, which also includes, among others, Cheung Kong (Holdings) Ltd, Hutchison Whampoa Ltd and Power Assets Holdings Ltd.
CKI’s other New Zealand assets include Wellington Electricity Lines, formerly owned by Vector.