BINGO Industries completed the final round of regulatory requirements to acquire the waste management services provider, Dial-a-Dump Industries (DADI). The news sent the stock price to edge up by 4.407% in a day trade before closing at $1.540 on 26 March 2019.
In the announcement to Australian Securities Exchange, BINGO Industries Limited (ASX: BIN) announced the completion of Dial-a-Dump Industries’ acquisition that comes after the approval of Australian Competition and Consumer Commission’s (ACCC).
BINGO has acquired Dial-a-Dump at a consideration of ~577.5 million that includes the cash component of $377.5 million and scrip component of 78,740,154 BINGO shares at an offer price of $2.54 per share. The company funded the cash consideration through an underwritten Entitlement Offer that raised $425 million at $2.54 per share.
BINGO’s Managing Director and CEO, Daniel Tartak expressed that the completion of DADI’s acquisition reinforces BINGO’s focus on expanding its footprints across the network of strategic waste infrastructure assets. The acquisition also possesses the potential to support the company’s ongoing diversification into Commercial & Industrial (C&I) waste processing and enhanced vertical integration.
DADI Founder Ian Malouf will now be the part of BINGO Board in the role of Non-Executive Director along with holding a relevant interest in approximately 12% of BINGO as a result of the BINGO shares issued to him at the completion of the acquisition. However, the shares held by Mr Malouf are subject to escrow over four equal tranches.
Ian Malouf expressed his commitment to BINGO’s vision that defines the creation of Recycling ecological park with the objective to consolidate the company’s recycling, processing, distribution and landfill at a single site and deliver significant economic benefits and operational efficiencies. Ian further stated that “I (Ian Malouf) am looking forward to supporting Daniel as a BINGO Board member and excited to help shape the next stage of BINGO’s journey.”
Post-acquisition, BINGO aims to deliver the cost synergies of $15 million per annum over the two years, together with further revenue uplift opportunities. The acquisition would enable BINGO to accelerate the development of its Recycling Ecology Park at Eastern Creek and achieve the recycling operations in the greater Sydney region.
Based in New South Wales, Dial-a-Dump Industries (DADI) is into the business of providing a fully integrated recycling and waste management services. It functions across the waste value chain with its principal ‘Eastern Creek’ recycling and landfill asset located in Western Sydney that has a useful remaining landfill life of about 15 years.
The company further ensured the shareholders about the smooth integration process which will reportedly be performed by the dedicated integration team without compromising the day-to-day operations of both businesses.
BIN last traded at a price to earnings multiple of 19.560x with a market capitalisation of $859.03 million as at 26 March 2019. Over the past 12 months, the stock has witnessed a negative performance change of 44.53% including a decline of 21.12% recorded in the last three months.
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