Photographer: Stephane de Sakutin/AFP via Getty Images
Firm That Grinds Up iPhones Is Drawing Bids From Private Equity GiantsBy
Olympus Capital Asia seeking sale of Li Tong Group stake
Deal could value Apple contractor at as much as $1 billion
Olympus Capital Asia is pursuing a sale of its stake in iPhone recycling business Li Tong Group in a deal that could value the company at as much as $1 billion, people familiar with the matter said.
Private equity firms Bain Capital and Blackstone Group LP are among bidders competing for the Apple Inc. contractor, according to the people, who asked not to be identified because the information is private. The sale has also attracted initial interest from tech-focused investment firm Silver Lake, the people said. Olympus Capital Asia and other Li Tong shareholders are still discussing the size of the stake they plan to offer, which may allow suitors to buy control of the Hong Kong-based company, the people said.
Li Tong, which is one of the contractors chosen by Apple to grind up and recycle its iconic gadgets, could be valued at $750 million to $1 billion in any transaction, according to the people. The closely-held company, which also recycles equipment from other manufacturers, runs more than 20 facilities spread across North America, Asia, Europe and the Middle East.
Electronic waste resulting from mobile phones, computers and other devices reached 44.7 million metric tons in 2016, with just 20 percent of that recycled, according to the United Nations. The amount of e-waste generated annually is set to rise to 52.2 million tons by 2021, the UN estimates.
Olympus Capital Asia, a mid-market regional private equity firm, announced a $45 million investment in Li Tong in December 2015. No final decisions have been made, and there’s no certainty the negotiations will lead to a sale, according to the people.
David Shen, a managing director at Olympus Capital Asia, declined to comment. An official at Li Tong didn’t immediately answer phone calls and a text message seeking comment. Representatives for Bain, Blackstone and Silver Lake declined to comment. Peter Grauer, chairman of Bloomberg LP, is a non-executive director at Blackstone.
Apple pays recyclers like Li Tong a fee to shred its old phones, tablets and computers in a closely-monitored process. The disassembly consists of about 10 steps that takes the device through vacuum-sealed rooms designed to capture 100 percent of the chemicals and gases released, Li Tong’s chief strategy officer, Linda Li, said in a 2016 interview.
Recyclers need to have dedicated facilities for the notoriously secretive Apple, and Apple staff monitor the process. Li Tong employs more than 1,200 people worldwide, its website shows.
Private equity buyers have stepped up their acquisitions of Hong Kong companies, announcing more than $8.6 billion of deals in the past two years, according to data compiled by Bloomberg. Notable transactions included the acquisitions of two fixed-line telecommunications operators in the former British colony, as well as a purchase of the Pure Group gym chain.
Separately, buyout firms including Affinity Equity Partners and Baring Private Equity Asia Ltd. are bidding for garment label manufacturer Trimco International Holdings Ltd., people familiar with the matter said in December.
— With assistance by Sarah Syed, and David Carey