Bingo Industries Enters Scheme of Arrangement for Major Acquisition
- Bingo enters a 100 per cent acquisition agreement at $3.45 per share.
- The offer has been made by Macquarie Infrastructure and Real Assets Fund (MIRA).
- Bingo Shares opened 6.8 per cent higher following the announcement.
Bingo Industries (ASX: BIN) has today confirmed media speculation that the company has come to an agreement with Macquarie Infrastructure and Real Assets Fund (MIRA). The Macquarie fund would acquire 100 per cent of the share capital of Bingo by scheme of arrangement. Previously the Australian Financial Review reported that Private Equity firm CPE Capital was looking to launch a joint Bid with Macquarie but is no longer part of the deal.
Shareholders of Bingo will have the options to receive $3.45 per share or the combination of “cash and unlisted script. The off is a 33 per cent premium to the company’s one-month volume-weighted moving average and implies earnings before interest, taxation, depreciation and amortization (EBITDA) of 19.5 times. The alternate offer provided by the arrangement offers $1.32 in cash and the remainder in unlisted script.
A Bingo Independent Board Committee (IBC) formed for the proposal has “unanimously recommended that shareholders vote in favour of the scheme” even after considering a variety of alternation offers and opportunities for the business. The directors of Bingo who have issues this recommendation control 31.57 per cent of BINGO shares, all maintaining their intention to favour the scheme. Moving forward, Bingo will hold a meeting in July 2021 to vote on the Scheme with UBS a lead financial advisor.
Further, Bingo also looks to pay a fully Franked Special Dividend of 0.117 per share prior to implementing the acquisition. Fundamentally the business remains in a strong position to accelerate its foothold in the Australian Waste management Market. As stated in their 1H FY21 half-year results, the company was impacted “far less than originally anticipated” by COVID-19, with wit Underlying revenue falling just5 3.1 per cent.
The Waste Management sector has an inbuilt environmental consideration that heightens the importance and relevance of the company’s operations. Ironically, Bingo Industries has adopted the catchphrase, “Building a Waste-Free Australia,” which places a focus on sustainability initiatives that include recycling led solutions and Eco-Technology’s to maximize the outcomes of the company’s operations. The company’s Eco-Products include the development of Aggregate, Sand, Roadbase and Mulch from a variety of recycled materials. Further, the company has invested heavily in its recycling and resource management infrastructure.
As of the 27th of April 2021, Bingo Shares are trading 6.8 per cent higher at the opening price of $3.42 per share. The company is now trading just 5 cents shy of its all-time highs of $3.47 per share set pre-COVID-19.