The Carlyle Group has moved into pole position to buy Waste Services Group, say sources, in a deal likely to top $1bn.
The understanding is the final stage of the competition has included Pacific Equity Partners and Carlyle, while there has been talk another private equity firm has also been in the mix.
Binding offers are due within days to private equity owner Livingbridge.
Carlyle’s Australia and New Zealand operations are headed by Geoff Hutchinson, the former co-head of Morrison for ANZ and a former Pacific Equity Partners managing director, and the understanding is the US-based firm is eager to embark on a transaction in the local market.
WSG’s earnings before interest, tax, depreciation and amortisation could increase from $100m to about $250m in five years, bidders have been told in the UBS-advised contest.
The business has about 6000 customers across managed services and collections, with brands such as Premier Waste, Superior Waste, Waste Free, Paper Resource, Specialised Services, Argus and APC Waste Consultants.
Carlyle has $US447bn of assets under management, as it recently raised money for its latest US real estate and global credit funds, the Wall Street Journal reported.
Last month, Carlyle listed aircraft engine maintenance provider StandardAero on the New York Stock Exchange, raising $US1.44bn and took public scientific and industrial instrument manufacturer Rigaku with a listing on the Tokyo Stock Exchange which raised $US863m.
Chief executive Harvey Schwartz told the WSJ recently Donald Trump’s convincing election win and lower interest rates provide “powerful elixirs” for private equity, which are likely to accelerate acquisition activity while boosting investor returns.
The election helps remove uncertainty from the market when it comes to “strategy, committing capital and making decisions,” he said, adding further tax cuts in the Trump era would also assist.
The Washington-based firm has $US85bn available to invest, according to its most recent earnings presentation.
It raised $US26.6bn in the year to September and the goal is to hit $40bn of annual capital inflows.
Carlyle’s fee-related earnings jumped 36 per cent to a quarterly record $US277.9m in the third quarter and distributable earnings were largely flat at $US367.1m.
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