Citi, Skye advise Palisade on winning bid for Downer’s Repurpose It
Palisade Impact, the core-plus infrastructure house set up by ex-Macquarie duo Steve Gross and Jeremy Wernert, has won the auction for Downer EDI’s Victorian waste management business, Repurpose It, with a $220 million bid.
Palisade Investment Partners’ Jeremy Wernert and Steve Gross. Tash Sorensen
Sources said Palisade Impact spent the last five months in exclusive negotiations with Downer EDI. It had Citi as its financial adviser, while Skye Capital Advisory lined up the debt financing.
The sale price is understood to have valued Repurpose It at less than seven-times EBITDA, which is at the lower end of the seven-times to 15-times multiple that waste management businesses have traditionally fetched.
Palisade re-entered the auction after Repurpose It’s Florida-headquartered bidder, I Squared Capital, fell off its preferred bidder status. I Squared pulled to the front of the line – ahead of London’s Intermediate Capital Group and Palisade Impact– around June after the binding bids went in. Its offer was circa $250 million, as Street Talk reported.
But Downer and its sell-side adviser, Barrenjoey, went back to underbidders when the I Squared bid deal not work out – paving the way for the deal announced on Friday morning. Earlier in the sale process, the asset had attracted the attention of ASX-listed waste management company Cleanaway, Pacific Equity Partners and Igneo Infrastructure Partners.
Repurpose It has two parts: recycling construction and demolition waste, where it turns infrastructure spoil (contaminated soil) into landscaping and construction materials; and recycling organics, including food and garden waste. Downer bought a 45 per cent stake in March 2019, and the entire business was put up for sale in
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