Intermediate Capital and KKR consider Repurpose It bid - sources

Breaking News 16 February

Intermediate Capital and KKR consider Repurpose It bid - sources

Intermediate Capital Group’s  [LON:ICP] (ICG) new Asia Pacific infrastructure arm and KKR’s infra division are among investors considering a bid for waste business Repurpose It, Mergermarket's sister publication Infralogic reported, citing two sources familiar with the matter. 

A third source familiar said the dataroom for the sale was opened on 15 February after a teaser was circulated earlier this year, adding the due date for indicative bids is 24 March.

Pacific Equity Partners (PEP) and Igneo Infrastructure Partners were also expected to consider bidding, as reported by Infralogic early this month. 

Repurpose It’s owners, including ASX-listed construction company Downer [ASX:DOW] that owns 45%, appointed Barrenjoey Capital late last year to advise on the sale.

UK-based, LSE-listed investor ICG has an unlisted infrastructure fund that has had two funding rounds so far, with investments in Europe and North America, but until recently its focus in the Asia Pacific region has been confined to higher risk, higher return private equity investments.

In December last year, it set up ICG Infrastructure Asia-Pacific, with a team in Singapore and Australia focused on investments in mid-sized infrastructure assets ranging from renewable energy, to electric vehicles, digital infrastructure and recycling and the circular economy.

KKR’s infra funds have bid on various mid-size to large deals in the Asia Pacific, particularly after it raised an APAC infra fund in 2019. That included bidding on Beijing Capital’s sale of its Waste Management New Zealand business last year.

PEP is planning to bid with its Secure Assets Funds, while Igneo has been building a waste platform, as reported, which now includes Waste Management NZ that it bought for NZD 1.9bn (USD 1.22bn).

Repurpose It takes a wide range of waste, particularly from industrial and construction sites, and recycles or repurposes it into numerous products including gravel, wood, sand and soil for new construction projects as well as compost, according to its website.

Mergermarket reported in 2020 that the company was seeking potential investors and joint venture (JV) partners to diversity into new market segments, citing CEO and co-founder George Hatzimanolis.

Downer bought a 50% stake in Repurpose It back in March 2019, without disclosing deal value. The listed group's shareholding went down to 45% in FY21, according to its 2021 annual report. 

Repurpose IT's EBITDA was around AUD 31m (USD 21.4m), according to its most recent annual results for the year through June 2022 filed with the corporate regulator, ASIC, in October. Total revenue more than doubled to AUD 96.4m, while net profit after tax more than tripled to AUD 14.7m, compared to the prior year.

Officials and spokespeople at ICG, KKR, Repurpose It and Barrenjoey either declined to comment or did not respond to requests.

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