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Macquarie Asset Management (MAM) has acquired the UK arm of waste management firm Suez from France-based Veolia for €2.4 billion (AUD$3.5 billion), representing a valuation of 16.9 times normalised EBITDA.
Announced overnight, the deal comes about as Veolia seeks to appease UK regulators which raised competition concerns over its merger with Suez.
Following the divestment, Veolia notes it will remain a major player in the UK waste management market with revenues of approximately €2 billion.
“The completion of this transaction allows to effectively address the main concerns of the UK Competition and Markets Authority,” Veolia says.
“The valuation level of the sale, showing a multiple of 16.9 times normalised EBITDA 2021, is significantly higher than the acquisition price resulting from the takeover bid. This price level immediately crystallises the value of all the synergies then contemplated.”
Veolia CEO Estelle Brachlianoff says she is “very satisfied” with the transaction.
“It will create significant value and strengthen our investment capacity in strategic markets. The valuation of these assets reflects both the initial price and the synergies expected from the combination, in line with all of the disposals carried out in the frame of the antitrust clearances, which are higher than the acquisition price of Suez,” Brachlianoff says.
“Following this transaction, Veolia will remain a major player in the waste sector in the United Kingdom and, more broadly, in the environmental services market in the region, which remains strategic for the group.”
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