UK’s Renewi targeted by Macquarie Infrastructure

Macquarie Asset Management of Australia is considering a possible cash offer for the entire issued and to-be-issued share capital of United Kingdom-based waste and recycling firm Renewi PLC.

The Australian finance firm says the offer has been prepared by funds it controls, including Macquarie Infrastructure, which is active in the waste and recycling sectors.

Although based in the U.K. and listed on the London Stock Exchange and the Euronext Amsterdam exchange, Renewi’s Commerical Waste and Specialties divisions operate in the Netherlands, Belgium, Spain and Portugal.

Last month, Renewi sold its U.K. residential collection and recycling assets to Biffa Ltd., another waste and recycling firm based in the U.K.

“The divestment is a key deliverable in Renewi’s portfolio optimization strategy and will allow the group to fully focus on its core recycling business in the Netherlands, Belgium, France and Portugal,” Renewi said at the time.

Renewi was formed in 2017 following the merger of U.K.-based Shanks and the Dutch waste and recycling company Van Gansewinkel Groep B.V. (VGG).

“We generate revenue by providing waste management services as well as converting most of the waste we collect into circular materials, which we sell to our customers,” Renewi says on its website. “We connect actors in the circular economy to develop new solutions together, enabling our partners to realize their circular ambitions."

Last year, a fund managed by Macquarie Asset Management (MAM) was involved in what was termed a recapitalization of Boca Raton, Florida-based Coastal Waste and Recycling, in the process becoming a majority owner of the business.

Two years before, Macquarie Infrastructure Partners (MIP) V invested an undisclosed amount in Rosemont, Illinois-based waste and recycling firm LRS.

Those two transactions represent several in the waste and recycling sectors made by Macquarie funds. In a 2019 interview with the Recycling Today Media Group, Paul Mitchener of MAM said, “We like the essential service characteristics of these businesses that generate stable performance and predictable cash flows. We also like that these businesses are highly regulated and have significant ongoing capital requirements that create barriers to entry.”

A document posted to the Macquarie website regarding the Renewi offer indicates the Australian funds are offering a premium of 57 percent to Renewi’s closing share price Nov. 27 and a premium of 41 percent to Renewi’s three-month volume weighted average share price through Nov. 27.

Because of Renewi’s dual listings in London and Amsterdam, the potential transaction with the firm will be subject to U.K. and Dutch financial sector and competition regulations.