Macquarie acquiring large stakes in GreenWaste and Zanker in its first California waste deal

GreenWaste and partner company Zanker Recycling's northern California operations include multiple organics recycling facilities. Moody's Investors Service estimates operations are generating $325 million in annual revenue.

What happened

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Why it matters

The California market is in the midst of a major shift, as companies and jurisdictions prepare for the implementation of statewide organics recycling requirements under SB 1383. GreenWaste already has notable infrastructure in this area, but Macquarie's investment would position the company to potentially take an even larger role.

According to a recent Moody's Investors Service assessment, the collective GreenWaste operations generated an estimated $325 million in annual revenue for the 12-month period ending July 31, 2021. The company is expected to generate $30 million in free cash flow for 2022, with 5% revenue growth projected "driven by contractually mandated price increases and new business wins."

The transaction is being funded by a $400 million, seven-year term loan in combination with an unspecified "equity contribution from a private infrastructure fund managed by Macquarie Infrastructure and Real Assets." In addition, a $100 million, five-year revolving credit facility is planned for future "working capital needs."

This news brief is based on reporting published by Waste Dive on 2021-10-13. The original report is linked below.