Waste management company Bingo Industries, which originated with only four garbage trucks in 2005, has been acquired by Macquarie Infrastructure and Real Assets (MIRA) and its managed funds in a substantial $2.3 billion agreement. This marks the end of a remarkable journey for Bingo, founded by the Tartak family, who still retains a 19.8 percent ownership. The company initially went public on the ASX in 2017 at an initial price of $1.80 per share.
The deal offers Bingo investors a choice between receiving $3.45 per share in cash or a combination of cash and unlisted scrip. Currently, Bingo operates a fleet of 330 garbage trucks. The news of the acquisition led to a surge in the stock price, which concluded the session at $3.40, an increase of 6.3 percent.
CEO Daniel Tartak, who holds a 19.8 percent stake in the company, has played a pivotal role. Bingo's independent board committee (IBC) unanimously endorsed the scheme, deeming it the best course for shareholders. IBC Chair Elizabeth Crouch stated that after evaluating various alternatives and considering the company's future prospects, risks, and regulatory factors, the committee concluded that the scheme offered compelling value for shareholders.
A significant portion of directors holding or controlling 31.57 percent of Bingo's outstanding shares intend to vote in favor of the acquisition, as per the board's announcement.
MIRA's Asia-Pacific head, Frank Kwok, highlighted that the proposal acknowledges Bingo's accomplishments and standing in the market, with a solid asset base and proficient management team. He expressed MIRA's eagerness to contribute its expertise in recycling and waste management, gained from global investments, to support Bingo's forthcoming growth phase.
It's worth noting that Bingo's independent chairman and non-executive director, Michael Coleman, recused himself from discussions due to his role at Macquarie Group Limited.
In terms of financial specifics, Bingo anticipates declaring a fully franked special dividend of 11.7 cents per share. This will result in around 0.5 cents of franking credits per share. An alternative option to the cash consideration is a combination of cash and unlisted scrip, amounting to $3.30 per share, with $1.32 in cash and the rest in unlisted scrip in Recycle and Resource Holdings Limited. Shareholders opting for this alternative are also eligible for an earn-out dividend of up to 80 cents per share.
Bingo's shares had previously surged in response to a proposed $2.6 billion takeover bid by CPE Capital and Macquarie. However, the share price has not exceeded $3.41 since then. The acquisition by MIRA and its funds marks a significant milestone for Bingo Industries, capping off its growth trajectory from a small fleet of garbage trucks to a notable player in the waste management sector.