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Veolia ES Solid Waste
Interested buyers of Veolia's North American solid waste business have submitted their first bids.
LAS VEGAS -- Strong preliminary interest is being shown in Veolia ES Solid Waste Inc., the Milwaukee-based solid waste management company put up for sale by its French parent.
Several private equity companies as well as a smaller amount of trash companies apparently made offers on Veolia ES Solid Waste by the time the deadline for initial bids came May 1.
Veolia ES Solid Waste CEO Jim Long, who was attending Waste Expo in Las Vegas on Wednesday, said he doesn't have any direct knowledge of who has made offers.
But securities analyst Michael E. Hoffman of Wunderlich Securities Inc. indicated he has heard 10 to 12 bids were submitted and two or three of those bids came from solid waste companies.
The price for the Veolia business could range from seven to eight times earnings before interest, taxes, depreciation and amortization. With an EBITDA number of about $230 million for Veolia, that means the ultimate selling price could be from about $1.6 billion to $1.8 billion, Hoffman said.
He believes the deal's structure favors private equity companies over solid waste management companies. That's because solid waste bidders typically offer make lower offers than private equity because they have an eye on keeping the business for the long term instead of flipping it within several years.
"I don't think the French care about the multiple. I think what they care about is the dollar amount and I think it's going to take more than $1.5 billion to sell it," he said.
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