£315m Morgan Stanley deal buys Wetherby’s Augean

Funds managed by Morgan Stanley Infrastructure have agreed a takeover bid for Wetherby-based hazardous waste management firm Augean worth up to £315 million.

Under the terms of the offer, Augean shareholders would receive £2.80 per share in cash and “a contingent entitlement of up to a further 20 pence in loan notes by way of a contingent value right linked to the outcome of the Outstanding Tax Claims (a CVR),” said Morgan Stanley Infrastructure.

“Together, the offer represents a total price per share of up to £3.00 …

“The offer, assuming each CVR delivers its maximum value of 20 pence in principal value of loan note, values the entire issued and to be issued ordinary share capital of Augean at approximately £314.9 million on a fully diluted basis …” 

Augean has been involved in a long-running dispute with HMRC over landfill taxes.

Alberto Donzelli, MD of European Investing for Morgan Stanley’s global private infrastructure investment platform, MSIP, said: “Augean is a UK-based hazardous waste management operator with an excellent reputation amongst its customer base.

“We look forward to working with management, and contributing MSIP’s expertise, to support the company in further strengthening its industry leading position.”

Augean executive chairman Jim Meredith said: The board of Augean believes that MSIP is well-respected as a long-term investor in the infrastructure sector and will be able to support Augean’s strategy of providing the highest level of customer service and safe operations in niche and highly regulated hazardous waste markets which should allow the business to develop its services to an increasing breadth of customers while offering commensurate opportunities for our employees.

“We are very proud of Augean’s performance in successfully executing a complex turnaround programme and delivering very strong share price performance in recent years.

“This has been achieved through contributions from employees across the whole spectrum of the company not least from the senior management team, resulting in a significant increase in shareholder value.

“We believe that the acquisition provides attractive value to Augean shareholders whilst enabling them to retain potential upside to the ongoing Tax Claims.

“As MSIP intends to maintain the same strategy and footprint, we also believe that the acquisition is a good outcome for all Augean stakeholders, including our employees, our customers and the wider UK economy.”

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Mark McSherry
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