KKR, Macquarie eyeing Singapore’s waste management firm SembWaste – sources

By Kane Wu and Yantoultra Ngui

HONG KONG/SINGAPORE (Reuters) – U.S. private equity group KKR & Co (NYSE:) Inc and Australia’s Macquarie Asset Management are among potential bidders for the waste and recycling management arm of Singapore’s energy group Sembcorp in a deal that could value the unit at around $500 million, said two sources with knowledge of the matter.

Sembcorp, which is 49.3% owned by Singapore’s state investor Temasek Holdings, has hired HSBC to run the sale of SembWaste, according to the sources. HSBC declined to comment.

First-round of non-binding bids are due by early June, said one of the sources, declining to be named as the matter is private.

Last year, SembWaste’s earnings before interest, taxes, depreciation, and amortization was S$50 million ($37.75 million), one of the sources added.

Potential bidders also include global infrastructure investment manager I Squared Capital, the sources added.

KKR and Macquarie Asset declined to comment. Sembcorp and I Squared Capital did not immediately respond to requests seeking comment.

The sale comes at a time when many cities in Southeast Asia need more investment in the waste management sector, due to their rapid growth in population and a shift towards both greener and cleaner energy and environment.

Last year, Singapore’s asset manager Keppel (OTC:) consortium bought a 80% stake in environmental services firm 800 Super Holdings for S$304 million.

SembWaste is one of three public waste collectors appointed by Singapore’s National Environment Agency to provide waste and recyclable collection services to residential, schools and trade premises in the city-state, according to its website.

Besides SembWaste, Singapore-listed Sembcorp is also involved in renewable energy businesses and has a balanced energy portfolio of 17.2 gigawatt, with 10.3 gigawatt of gross renewable energy capacity comprising solar, wind and energy storage globally, according to its website.

Shares of Sembcorp have surged 36.5% year-to-date, beating the local benchmark stock index’s 0.2% rise. It commands a market value of $6.2 billion, according to Refinitiv data.

($1 = 1.3245 Singapore dollars)