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Estre Ambiental to Acquire Three Independent Waste Management Companies in Brazil

In aggregate, the three companies expected to be acquired operate 229 collection vehicles and one landfill asset, servicing 97 clients.

Estre Ambiental S.A., has entered into three independent memoranda of understanding to acquire three waste management companies in Brazil. All three transactions are expected to be completed in early 2018.

In August, Estre entered into a definitive agreement to combine with Boulevard Acquisition Corp. II in a transaction that will result in a new-publicly listed combined company Estre Ambiental Inc., (ESI) which will have its shares traded on NASDAQ in the U.S.. As of August, the company estimated it would have an anticipated initial enterprise value of approximately $1.1 billion.

Estre provides collection, transfer, recycling and disposal services to more than 31 million people in seven Brazilian states, prior to the new acquisitions. Currently Estre's landfill operations, which are focused around 13 strategically located landfills, dispose of approximately 6.0 million tons of waste annually.

In aggregate, the three companies expected to be acquired operate 229 collection vehicles and one landfill asset, servicing 97 clients. With expected combined annual revenues of approximately $67 million and Adjusted EBITDA of $13.5 million in 2017, the three companies collectively are expected to contribute an incremental $9.5 million to ESI's projected 2018 Adjusted EBITDA.

Estre officials believe that the average purchase multiple of approximately 3.5x Adjusted EBITDA (pre-synergies) further validates the contemplated acquisitions and Estre's inorganic growth thesis.

They also believe the acquisitions will position the company to expand in three distinct, strategically-important geographic areas.

The three transactions are independent of each other, are with unrelated sellers and are not conditioned on each other in any way.

"As the leading waste management company in Brazil and Latin America, our goal is to continue capturing growth and investing in attractive acquisition opportunities,” Estre CEO Sérgio Pedreiro said in a statement. “We are pleased to have reached agreements with three strong local players that will contribute new customer contracts, additional operating assets and increased landfill capacity. Beyond these proposed transactions, we have a robust pipeline of additional acquisitions which we also intend to aggressively pursue."

Estre has some well known figures from the U.S. waste industry on its board. In September, the company named three independent members to its board, including Advanced Disposal CEO Richard Burke  and Robert C. "Bob" Boucher Jr., CEO and president of Wheelabrator Technologies. In October, John J. Morris, Jr., senior vice president of field operations for Waste Management, also was named as an independent member of Estre's board of directors.

In addition, Klaus Pohle, former president of the Accounting Standards Committee of Germany, which advises the German government and the European commission on the process of approving new international accounting and financial reporting standards, was also named to the board.

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