Pacific Equity Partners joins competition for Waste Services Group

The understanding is Waste Services Group is valued at approximately $1bn.

A new suitor for Waste Services Group has emerged: Pacific Equity Partners.

The Australian private equity firm will take on Affinity Equity Partners in the competition, which is advised by Barrenjoey.

The business is described as an attractive offering with strong growth prospects. Adviser UBS suggests its earnings before interest, tax, depreciation and amortisation may swell from $100m this year to $250m in five years’ time.

Established in 2016 and run by Matt Tamplin, WSG has about 6000 customers across managed services and collections, with brands including Premier Waste, Superior Waste, Waste Free and Paper Resource in its solids unit, and Specialised Services, Argus and APC Waste Consultants.

The understanding is there’s a valuation of about $1bn on the business, owned by private equity firm Livingbridge.

The question is whether other infrastructure groups will line up to take on private equity.

So far, the chatter in the market is that Singapore’s Keppel is undecided, while Morgan Stanley Infrastructure Partners is not a contender and Morrison & Co is no sure bet.

Swedish private equity firm EQT is undecided whether to bid for the business through its private equity arm or its infrastructure operations, if at all.

The private equity side of Sydney-based PEP, rather than its infrastructure fund, is understood to be looking at WSG. PEP is understood to be keen for acquisitions after timing the divestment of many of its investments nicely at the peak of the market about two years ago and since raising fresh funds.

It is understood to be bidding for the $1bn childcare business Guardian Early Learning, which is up for sale through Morgan Stanley on behalf of Partners Group. Partners purchased the business from Navis Capital in 2016 for $440m, including debt.

There’s talk investment bank UBS has started sounding out potential suitors for the Darrell Lea owner Rite Bite Group on behalf of Quadrant Private Equity, and some believe PEP would be a logical suitor, given its previous history owning food manufacturing companies such as Patties and Griffins Foods.

As earlier reported by DataRoom, it is also one of two final contenders for the Healius Lumus Imaging business, up for sale through UBS for $700m.

PEP is taking on TPG Capital, which some believe is the frontrunner to buy the diagnostic imaging provider.