Carlyle Group Inc. secured private credit financing for its majority stake acquisition of Waste Services Group Pty., an Australian waste management company. This strategic move highlights the growing reliance on private credit in large-scale acquisitions.
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Private Credit Fuels Carlyle’s Waste Management Investment
Carlyle finalized a substantial unitranche loan exceeding A$500 million ($318 million) from prominent lenders including Ares Management Corp., KKR Credit Advisors, and UBS Group AG. This funding will facilitate the purchase of the stake from Livingbridge EP LLP, the current majority shareholder.
While financial details remain undisclosed, Carlyle confirmed that equity for the investment will originate from funds under Carlyle Asia Partners. Furthermore, Livingbridge will retain a significant minority stake through reinvestment, signaling continued confidence in the company’s future prospects. Initially, Carlyle explored traditional leveraged buyout bank loans but ultimately opted for private credit. All involved parties declined to comment on the specifics of the financing, which was initially reported by the Australian Financial Review.
Australian Leveraged Buyout Landscape Gains Momentum
This transaction underscores a broader trend in Australia’s leveraged buyout market, with increasing activity fueled by narrowing valuation gaps between buyers and sellers. This surge in deal-making presents lucrative opportunities for lenders eager to finance such transactions. Recent examples of this trend include Blackstone Inc.’s significant A$24 billion acquisition of AirTrunk Operating Pty Ltd. and Vocus Group Ltd.’s takeover of TPG Telecom Ltd.’s fiber network.
Waste Services Group: A Leading Player in Australian Waste Management
Founded in 2016, Waste Services Group provides comprehensive waste collection and recycling services across Victoria and New South Wales. The company’s strategic footprint and established operations position it for continued growth within Australia’s evolving waste management sector. Carlyle’s investment, facilitated by private credit, will likely further enhance Waste Services Group’s capabilities and market position.
Private Credit’s Growing Prominence in Acquisitions
The utilization of private credit in this acquisition signifies its growing importance as a viable financing alternative for large-scale transactions. As traditional lending markets experience fluctuations, private credit offers flexibility and speed, making it an increasingly attractive option for private equity firms like Carlyle. This trend is expected to continue as the private credit market expands and matures. The Waste Services Group deal serves as a prime example of how private credit is shaping the landscape of mergers and acquisitions. The successful securing of financing underscores the attractiveness of Waste Services Group as an investment opportunity and highlights the confidence lenders have in both Carlyle’s acquisition strategy and the Australian waste management sector.
