Let’s get wasted: rivals in $577m merger

Dial A Dump founder Ian Malouf will throw a big party after a six-month wait to sell his business to Bingo Industries for $577m.

an Malouf is celebrating the sale approval but says ‘I’m pissed off they had to sell an asset — that’s communism right there’. Picture: John Feder

Dial A Dump founder Ian Malouf will throw a big party after a six-month wait to sell his business to the ASX-listed Bingo Industries for $577 million in cash and shares ended yesterday when the competition regulator said it would not oppose the deal.

The Australian Competition & Consumer Commission gave the green light after Bingo said it would divest a processing facility at Banksmeadow in NSW to allay concerns about market domination in the building and demolition waste sector in Sydney.

“I think we’ll get on the grog and have a few beers. This one is worth celebrating,” Mr Malouf told The Australian after the deal was approved.

“We had a wait a while for it and I’m pissed off they had to sell an asset — that’s communism right there.

“But all in all I’m happy and we’ll get to work. It has been hard to keep working given we were waiting. You do your best, but we’ve got there now.”

Bingo and Mr Malouf first struck an agreement in August for the sale, after which the ACCC launched an investigation into the deal in late November, citing its effect on competition in waste processing, landfill and collections in eastern and inner-city Sydney. Mr Malouf dismissed concerns about the recent fall in Bingo’s share price, after it warned of a housing slowdown last week and its shares halved in a day, given he will emerge with about 12 per cent of the company’s shares as part of the transaction.

He insisted the merger was positive for both companies.

“People who sold out last week will soon say ‘What the hell was I doing?’,” Mr Malouf said.

“But we’ll wake up and get straight to work, bringing the synergies together between these two companies and it’s going to be awesome.”

Bingo shares closed up about 15 per cent to $1.67. Mr Malouf will join the Bingo board but said he would be a hands-on director.

“We’ve been competing against each other for 10 years but now we’re going to combine the culture and the talent and come up with something really good,” he said.

“I’m looking forward to rolling up the sleeves and getting into the operational side of things. I’ve had clients for 35 years and I won’t be walking away from them.”

Mr Malouf owns the majority of Dial A Dump, which he began as a one-man rubbish collection business while still a student in 1984 and built into a business that had pre-tax earnings of $51.6m in 2018. Last year he struck a $100m deal with billionaire retailer Brett Blundy to buy out his share of the business ahead of the Bingo sale. The ACCC noted building and demolition waste processors will still have sufficient dry landfill alternatives to Bingo after the deal completes in March despite the company holding a significant share of the Sydney market.

The introduction of the Queensland landfill levy will likely lead to a boost in Sydney landfill prices this year regardless of the Bingo deal, according to the regulator, providing an incentive for more recycling and landfill capacity being made available in NSW.

The Sydney-based Tartak family, who built a small skip bin company into a waste management and environmental operator, have embarked on the chunky deal to help Bingo gain scale and compete against larger competitors, including Suez, Veolia and Cleanaway.

Bingo proposes to fund the deal via a $425m entitlement offer at $2.54 a share with Dial A Dump to receive $378m in cash and $200m in Bingo shares, the majority of which goes to Mr Malouf.

His stake will be subject to escrow split in four equal tranches which can be cashed in nine, 12, 18 and 24 months after the deal is finalised.