NSW to sell waste business for $235m
SITA Environmental Solutions has won the bid for NSW government waste business WSN, boosting its presence in recycling and collection.
SITA, which is owned by a joint venture between French group Suez and Singapore-listed Sembcorp, is understood to have paid $235 million for the business, which was put on the sale blocks early this year.
Kristina Keneally’s state government is due to announce the outcome of the WSN sale, alongside the larger $5.3bn privatisation of its power assets, around 5pm this evening.
The Australian Online exclusively revealed that Origin Energy would pay $3.25bn for retailers Country Energy and Integral Energy, along with the trading rights to Eraring, one of Australia’s two largest power stations.
TRUenergy will pay $2.1bn for EnergyAustralia and the Delta West station.
SITA beat other interested parties, which were thought to include private equity firms Archer Capital and Ironbridge Capital, as well as rival industry player Remondis.
Brisbane-based Transpacific Industries was viewed as a strong possible contender earlier in the process, but the group pulled out of bidding last month.
The acquisition of WSN will strengthen SITA's waste management portfolio, which includes servicing 15 municipalities in Australia spanning three million individuals and 43,000 businesses.
According to the Australian Consumer and Competition Commission website, SITA applied for clearance to buy WSN when it began seriously looking at the business in July.
Goldman Sachs advised the NSW government and Morgan Stanley acted for SITA.
State treasurer Eric Roozendaal said he had accepted the multi-million dollar offer from SITA, after a transaction process that had attracted interest from across Australia and overseas.
WSN boasts 11 facilities for waste recycling, processing and disposal across Sydney, and offers kerbside collection, transport and disposal services.
“This is a strong result, which further strengthens the state's balance sheet,” Mr Roozendaal said.
“The government received a number of final offers, each of which was assessed against robust criteria - including fair and equitable treatment of staff and the minimisation of risks to the state.
“SITA Environmental Solutions is a significant trade player with a proven track record in the waste sector and has been at the forefront of waste recycling and recovery in both Australia and internationally.”
Mr Roozendaal has often said the sale would end the conflict of interest, whereby the government is both the owner and regulator of the industry.
The transfer is expected to be completed by the end of January, 2011.