#None #Madrid #Blackstone #Platinum Equity #Urbaser

Recent Major Acquisition in Environmental Services

In a significant move within the environmental services sector, Platinum Equity, a prominent global investment firm, announced the completion of an agreement to sell Urbaser, a premier environmental infrastructure platform, to private equity giants Blackstone and EQT for an estimated $6.6 billion. This sale marks a pivotal moment in the industry considering Urbaser’s extensive reach and integral services.

Urbaser's Position in the Market

Urbaser is headquartered in Madrid, Spain, and operates as a vital player in the collection, management, and treatment of municipal and industrial waste. The company has built a robust network, employing over 50,000 individuals and serving more than 60 million people globally. The operational structure of Urbaser consists of three main business segments: Urban Services, Municipal Waste Treatment, and Industrial Waste Treatment, signifying its comprehensive approach to environmental challenges.

Platinum Equity had strategically acquired Urbaser in October 2021 from China Tianying Inc. for approximately $4.2 billion. The company’s transformation during Platinum’s ownership has underscored the potential for growth in the environmental sector, especially with increasing global emphasis on sustainability and waste management solutions.

Transformation and Strategic Enhancements

The journey leading to this sale involved a multi-year transformation aimed at bolstering Urbaser’s operational efficiency and market positioning. Louis Samson, Co-President of Platinum Equity, described the efforts made in refining the business structure and enhancing its capabilities. Key highlights from this transformation include:

• - An investment of €1.6 billion over five years, focusing on capital expenditures and mergers and acquisitions.
• - Execution of 20 additional acquisitions to strengthen Urbaser’s offerings and market presence.
• - Divestiture of 13 non-core divisions, allowing for a refined focus on primary business areas.
• - Revenue growth exceeding 60% and EBITDA growth of 70% since 2020, with consistent growth across all operational geographies.
• - Significant scaling of both municipal and industrial waste treatment operations, capitalizing on long-term contracts that provide reliable cash flows and attractive returns.
• - An increase in backlog to over €15 billion, significantly elevating the company's future revenue potential.

The successful restructuring also involved onboarding a new executive leadership team, led by CEO Fernando Abril-Martorell, who guided the strategic vision for Urbaser moving forward. Abril-Martorell expressed gratitude towards Platinum’s operational and financial support that played a crucial role in achieving their ambitious goals.

Future Prospects and Remaining Assets

As part of the sale agreement, Platinum Equity has retained control over Urbaser’s operations in Argentina, which boasts a three-decade history in the region. This segment has been generating a noteworthy EBITDA of approximately $90 million, reflecting the profitable nature of these operations.

The transaction is subject to customary regulatory approvals, showcasing Platinum’s commitment to compliance in large-scale transactions. Additionally, the move to refinance Urbaser’s capital structure reflects a proactive approach to adapting to changing financial landscapes, aiming to leverage new opportunities in the capital markets.

Conclusion

The acquisition of Urbaser by Blackstone and EQT signals a substantial shift in the environmental services landscape, indicative of growing investment in sustainability-centric businesses. Platinum Equity’s ability to enhance Urbaser’s operational scale and efficiency reinforces the strategic focus on environmentally responsible waste management practices, a necessity in today's global economic climate.

As the transaction unfolds, stakeholders will be keenly observing how this newly structured Urbaser navigates its next chapter under new ownership, while continuing to provide essential environmental services worldwide.