Greenstar, the waste unit of National Toll Roads, is gearing up for a fresh round of acquisitions in the coming months with new debt finance of €200 million.
Chief executive Steve Cowman said the credit line, agreed yesterday from a syndicate of Irish and international banks, will give the company "sprint capacity" whenever buy-out opportunities emerge in an industry that is consolidating rapidly.
"It's upfront approval, so we can move very quickly on small, medium and large acquisitions if the right one comes along."
Mr Cowman declined to say what the company's acquisition targets were. However, that the company's latest credit line comes only three years after it raised €100 million in a separate round of financing suggests it is preparing for a big strategic acquisition.
Conventional analyses of the waste business suggest that bigger players such as Advanced Environmental Solutions (AES), Oxigen and Thornton may come up for sale this year.
Smartforce founder Bill McCabe is a big shareholder in AES. Oxigen is controlled by businessman Seán Doyle and Thornton is owned by the family of the late Pádraig Thornton.
The company also plans an expansion into Northern Ireland.
Mr Cowman said Greenstar was currently in discussions for "three small acquisitions", deals that will follow its purchase last year of Séamus Kelly & Sons in Wexford and Waste Disposal Sligo. In addition, he said, Greenstar was looking out for a bigger transaction. "There will be one or two big deals that will happen in the next 12 months," he said of the waste industry generally.
Bank of Ireland was lead lender in the five-year syndicated loan to Greenstar. The other lenders included AIB, Ulster Bank, Bank of Scotland (Ireland), IIB Bank, Barclays and Rabobank.
There are three elements to the debt facility: a fixed-term loan; a revolving credit line; and a portion set aside for a big acquisition.
"This deal represents a significant milestone for Greenstar and provides it with the financial flexibility to execute its strategic objectives," said the chief executive of Bank of Ireland corporate banking, Tom Hayes.
In addition to funding acquisitions, the latest credit line will refinance the company's existing debt and facilitate its organic development.
Developments under way include the €20 million Millennium Park project in north Dublin, which will be Ireland's biggest recycling plant when it opens next summer. The company is also developing a landfill in Co Wicklow, which will be its fourth landfill to be licensed by the Environmental Protection Agency.
Greenstar acquired seven companies between 2000 and 2003 and its capital expenditure in the past seven years amounted to €170 million. It has 13 materials recycling plants, landfills in Kildare, Meath and Galway, and contracts to manage municipal recycling plants in Ballyogan, Dublin; Tubbercurry, Co Sligo; and Edenderry, Co Offaly.
