Private Equity giant, Blackstone, is exploring a possible sale of its interest in Beauparc Utilities, Ireland’s largest waste company, in a deal that would value the business at close to €1bn.

It is understood that Blackstone has hired advisers to look at the prospects of a sale of its minority stake in the business, probably to another private equity company.

A sale would seek to crystallise a sizeable profit on Blackstone’s initial investment, reflecting a large jump in the profitability of the business in the past two years, and the huge appetite among private equity for well-managed stable businesses with strong growth prospects.

Blackstone took a 37.6% stake in, in Beauparc, owner of the Greenstar and Panda waste companies February 2019. The US private equity group bought into the company, founded by entrepreneur Eamon Waters, to help drive Beauparc’s expansion plans in Europe and the UK.

Beauparc has acquired a number of companies in the past two years, including Renes Group in Holland, which it bought for just over €25m. It also acquired Associated Waste Management, a recycling company based in Leeds, for €22.9m. In addition Beauparc completed a string of smaller acquisitions in Scotland and the north of England.

It has also invested heavily in increasing the capacity of its recycling operations in the past three years.

Beauparc reported revenues of €362m in 2018, the last year for which accounts have been filed, and made a profit before exceptionals of €23.7m.

At that time, about 80% of its revenues were posted in Ireland, and these accounts would not reflect the contribution from the bulk of its UK and Euro-pean acquisitions.

Blackstone has never disclosed how much it paid for its 37.6% stake in the company, but it is believed the transaction valued Beauparc at several hundred million euros.

The industry is increasingly attractive to private equity for its combination of stable revenues on the collection side of the business, attractive margins on material recovery and waste-to-energy projects, and the opportunities for consolidation.

Among its recycling contracts, Renes services the largest fruit and vegetable distribution park in Europe. It offers a bespoke service to fruit distribution companies where it collects and processes packaging for recycling while the remaining product is sent for anaerobic digestion, then converted to biogas for electricity and heat.

This part of the business alone handles more than 50,000 tons of material each year.

It is an industry where experienced and proven management is highly prized, sources say, and this probably explains why Waters retained a majority stake when Blackstone bought in two years ago.

Waters started the company in 1990 with a couple of trucks collecting waste from businesses in Co Meath. The group employs more than 2,300 staff.

The merger between Panda and Greenstar in 2016 created Ireland’s largest waste business. Aside from its waste and recycling interests in Ireland, Beauparc owns Bioverda, which converts gas from landfill sites into electricity; Panda Power, a utility company; and Future Street, which has the licence for the Bigbelly solar-powered street bin composting technology.

Source: The Sunday Times

Can’t stop reading? Read more