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Macquarie highlights new private equity T&L and fleet push

Bingo deal is latest in string of moves echoing similar post-GFC action

 

Private equity takeovers involving fleet-owner and transport and logistics players are growing, with Bingo on the way to Macquarie control.

Waste-management firm Bingo has revealed it has entered into a scheme implementation deed (SID) with Macquarie Infrastructure and Real Assets (MIRA) and its managed funds to all its shares by way of scheme of arrangement (SOA).

“The proposal recognises Bingo’s achievements and position in the marketplace, with a strong asset base and highly capable management team,” MIRA Asia-Pacific head Frank Kwok says.

“With MIRA’s significant experience investing in and operating recycling and waste management businesses around the world, we look forward to bringing our expertise to support the team in delivering Bingo’s next phase of growth.”

The deal is valued at $2.8 billion and is backed by Bingo’s independent board committee (IBC) and directors, including MD and CEO Daniel Tartak.

“The IBC has explored a number of alternatives, including standalone value creation opportunities and alternative bidder interest,” IBC chair Elizabeth Crouch says, explaining the decision.

“After considering future opportunities for the business, along with economic, regulatory and execution risks, the IBC has unanimously concluded that the scheme is a compelling option which realises attractive value for our shareholders.”

The series of transactions over the past 18 months are reminiscent of private equity acquisition action a decade ago.

By far the biggest noise is Allegro Funds being in the midst of picking up Toll Global Express this month, thereby stealing the mantle previously held by Anchorage Capital Partners (ACP) with last year’s purchase of AHG Refrigerated Logistics, now known as Scott’s Refrigerated Logistics (ScottsRL).

Some of the recent deals are through companies private equity players already own.

Thus, Next Capital-controlled TM Insight opened its wallet for privately held XAct Solutions, while The Growth Fund is using truck and trailer accident repair firm Royan for a consolidation spree through that sector here and with an eye to New Zealand.


Read how Allegro Funds is picking up Toll Global Express, here


The moves compare with those around the time and during the aftermath of the Global Financial Crisis (GFC).

That period also saw Yarra Capital Partners, AEA Investors and Teachers’ Private Capital nab Dematic,

Forward Capital Partners (FCP) was formed to facilitate similar acquisitions.

In 2008, Gresham Partners brought out five family-owned transport and logistics businesses and placed them under the Silk Logistics banner.

The waste transport sector was not immune during the last spate, with the then Transpacific gaining $800 million from WP Holdings in return for an 18 per cent stake in 2009.

While private-equity involvement often came at times of stress for some transport fleets, it faced criticism for a lack of understanding of the industry and its needs, given that margins can be very tight and capital expenditure.

In 2008, refrigerated logistics player Pure Logistics collapsed, despite the involvement of ABN AMRO and ANZ Bank’s backing.

One trenchant critic was then-Toll Group MD Paul Little.

“I don’t believe the private equity sector has succeeded – it has moved into our industry and pushed the prices and expectations up,” Little observed at the Australian Logistics Council Forum in 2011.

“Do they add value to our industry? I don’t think so.

“I’m concerned to see the ownership of many of our assets in the industry by the private equity.”

Two years later, McAleese Transport, headed by Little’s fellow former-Toll senior executive, Mark Rowsthorn found itself in exposed to a regulatory and public backlash over a fatal and firey Mona Vale crash over the state of the fleet of its Cootes subsidiary that it had recently bought from Champ Private Equity.

Champ has always defended its handling of Cootes.

 

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