Bingo’s Investor Presentation
BINGO (ASX: BIN) was founded as a family run skip business company in Western Sydney operating with a diminutive inventory of 4 trucks and 100 bins. In 2005 BINGO was bought by the Tartak family and by 2014 BINGO had expanded to a fleet of 65 trucks, opened a dedicated recycling centre in Mortdale and a new focus within the Commercial and Industrial (C&I) market. Today BINGO is listed in the ASX 200, operating in both NSW and VIC with a total fleet of 254 trucks across both states.
Back in August of last year, BINGO announced its intention to acquire fully integrated NSW waste and recycling business Dial-a-Dump Industries (DADI) for $577.5 Million. On February 28th of this year, BINGO received ACCC approval regarding BINGO’s undertaking to divest its Banksmeadow post-collections facility with the formal acquisition completed in March of this year.
Dial-a-Dump Industries is a fully integrated recycling and waste management service provider in NSW, with operations across the waste value chain from collections, to recycling, landfill and recycled product sales. The acquisition includes its Genesis Transfer Station in Alexandria, Genesis Waste Facility (landfill, materials processing facility, and recycled products processing facility) at Eastern Creek and a collections fleet of 55 vehicles. BINGO’s acquisition of DADI has proven to be a catalyst for a major network reconfiguration with the purpose of enhancing the operational efficiency of BINGO’s strategic waste infrastructure assets.
One of the key issues for the ACCC in deciding to allow BINGO to proceed with their acquisition was the perceived loss of competition within the building and demolition waste processing sector in Sydney’s eastern suburbs and the inner-city. DADI owns a large dry landfill at Eastern Creek and BINGO owns a site in Patons Lane, and with strengthening focus worldwide on more sustainable waste management, approval for new dry landfills is becoming increasingly harder to obtain. On top of this, proposed closings of other Sydney dry waste landfills have elevated the ACCC’s concerns regarding BINGO’s market share of B&D waste management within Sydney.
“The transaction raised a number of significant concerns. Ultimately, we have concluded that the proposed acquisition, taking into consideration the divestiture undertaking, would be unlikely to substantially lessen competition in any market,” ACCC Chair Rod Sims said.
With the court-enforceable proposed divestment of BINGO’s Broadsmeadow processing facility, the ACCC ruled to allow BINGO to proceed with their acquisition.
Integration of DADI commenced in March and is progressing at the expected rate, with full integration proposed by March 2021. BINGO’s 3-month integration update illustrates a seamless transition from “acquisition mode to integration mode”, instils further confidence in their integration of pricing targets.
Daniel Tartak, Managing Director and Chief Executive Officer of BINGO Industries states: “Our acquisition of DADI will not only be transformational for BINGO, but also for recycling in the greater Sydney region… Our development of a Recycling Ecology Park at Eastern Creek will allow us to process and recycle every type of waste, accelerate our vertical integration and compete more effectively with the larger local and international players”.
The excitement surrounding BINGO’s growth is not completely unfounded. Whilst the aforementioned increasing global focus on a more sustainable world and the increasing dangers of climate change would place traditional waste management companies in need of serious re-evaluation, it has alternatively allowed BINGO to become an industry leader as a result of its heavy focus on sustainability. BINGO’s sustainability framework outlines the importance of BINGO’s objective to operate at the highest standards within the industry. Additionally, through Corporate Social Responsibility (CSR) programs such as the Pink BINGO trucks, BINGO has raised in excess of $700,000 for the NSW Cancer Council and the McGrath Foundation.
At the opening of the market BINGO shares were trading at $2.25, as of 11 am shares are up 1.11%, with a high of $2.31.
In summary, the ongoing integration of DADI into BINGO industries not only provides a very stronghold of the waste management market share within the Greater Sydney region, but it also allows for further development of sustainable waste management, and to further BINGO’s vision of a “waste-free Australia”.
By Dominic Pereira
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