Li Ka-Shing’s CKI to Buy New Zealand Firm for $421 MillionChris Bourke and Brett Foley
Billionaire Li Ka-shing’s Cheung Kong Infrastructure Holdings Ltd. will buy New Zealand waste company EnviroWaste for NZ$501 million ($421 million), the Hong Kong-based company’s third purchase in the past four months.
Ironbridge Capital Pty Ltd. will sell the company to Cheung Kong Infrastructure, known as CKI, subject to regulatory approvals, the Australian private equity firm said in a statement. Ironbridge paid NZ$259 million in 2007 for EnviroWaste, the second-largest waste services business in New Zealand, according to the buyout firm’s website.
The acquisition adds to utilities and infrastructure purchases Li has made in markets including Europe in the past three years. In July, he agreed to pay 645 million pounds ($1 billion) for Wales & West Utilities Ltd. in the U.K. and was involved in the acquisitions of Northumbrian Water Group Plc in 2011 and Electricite de France SA’s U.K. power networks the previous year.
“Waste management provides good opportunity for future growth,” CKI Group Managing Director Kam Hing Lam said in a separate statement. “It’s expected that New Zealand will experience long-term waste volume growth as the economy continues to expand.”
CKI has about HK$5 billion ($645 million) of cash and “will continue to explore acquisition opportunities,” Kam said. It already owns New Zealand distributor Wellington Electricity Lines Ltd with Power Assets Holdings Ltd., a company also controlled by Li.
EnviroWaste serves about half a million customers in New Zealand, according to CKI. It owns and manages waste collection facilities, transfer stations and landfills, as well as ancillary services such as bulk waste haulage and landfill gas-to-electricity generation.
The sale values EnviroWaste at 10 times earnings before interest, tax, depreciation and amortization for the year through June 2012 and includes NZ$11 million of debt, according to the statement.
Ironbridge has made 17 “bolt-on” acquisitions since its original investment in EnviroWaste, according to the release.
EnviroWaste is “well-placed” to “expand its operations under the ownership of CKI,” EnviroWaste Chairman Kim Ellis said in the statement. Its management team will remain.