Former Macquarie banker Declan Sherman to list Infragreen on ASX

Banker turned fitness guru Declan Sherman will launch his energy and recycling firm Infragreen on the stock market this month in a listing that aims to raise $40m.

Infragreen founder Declan Sherman is launching a energy and recycling IPO aiming to raise $40m.

Former Macquarie banker turned fitness guru Declan Sherman will launch his energy and recycling firm Infragreen on the stock market later this month in a listing that aims to raise $40m and has already been several times oversubscribed.

Brisbane-based Mr Sherman said Infragreen, which included four separate businesses involved in metal recycling, waste management, renewable energy and peaking power, would have a combined revenue of $250m in growing sectors of the economy linked to essential services.

Mr Sherman, 48, started his career as a Macquarie banker in the late 1990s before starting his own chain of fitness centres called Velocity in Brazil.

After moving back to Australia, he founded labour hire and recruitment firms PeopleIn before listing it with market cap of $64m.

“I have really taken a great deal of enjoyment out of growing businesses,” said Mr Sherman. “For me, this is a bit of a return to infrastructure investing, which is what I used to do when I worked at Macquarie in the first part of my career.

“Given everything that’s going on in infrastructure now, especially in recycling and energy, there’s just so much growth.”

Mr Sherman said he had decided to set up a holding company, rather than a fund, to bring together the four businesses because it was the best structure for the operation to grow. The listed company will be valued at $220m.

The listed company will include metal recycler Minemet, peaking power firm Merredin Energy, solar energy generator EnergyBuild and waste processing and recovery firm Pure Environmental. He said the firms would continue to operate as separate businesses.

Mr Sherman said the Infragreen IPO had attracted both institutional and retail investors interested in a portfolio of businesses underpinned by essential services.

“In an area like recycling, things have really changed in the last 20 years,” Mr Sherman said. “It has been led by government and regulations that say that rather than mining commodities, let’s recycle. So, they’ve made it more difficult to put things into landfill and they’ve encouraged people to recycle through various schemes.
“There is a long way to go because there’s still so many different waste streams which aren’t being recycled but that can be recycled.”

He said the renewable energy sector also faced its own challenges until governments put the right regulations in place and there is an orderly transition from fossil fuels.

Infragreen’s Merredin Energy operates an 82 MW gas turbine power station in Western Australia that runs on average for around 100 hours per year during periods of extremely hot weather in the Perth metropolitan area.

“Slowly people are understanding you cannot go to renewables unless you have support for that system,” he said. “And you will need fossil fuel power systems for that support, which is going to be gas. The worrying thing is you’ve got fossil fuels that are slowly being wound down, but the investment isn’t coming into renewables quickly enough because, in my opinion, there is just a whole lot of uncertainty that still exists from an investment perspective.

“So, they need to work out that certainty on the investment side and then just go slower on the wind down, so that way you’ll have an orderly transition.”

The offering, which is being co-managed by Barrenjoey and Morgans, is set to launch on the ASX on June 25.

Originally published as Former Macquarie banker Declan Sherman to list Infragreen on ASX