Cleanaway shares lift on acquisition of Melbourne-based Citywide
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The news: Shares in Cleanaway are trading higher after the waste management giant agreed to buy Melbourne-based Citywide Waste.
The numbers: Cleanaway said it will pay $110 million for the waste and recycling business and assets of Citywide.
As part of the deal, Cleanaway will also spend another $35 million to redevelop the Dynon Road waste transfer station — Victoria’s second largest — with the City of Melbourne to put in another $10 million.
Cleanaway shares were up 1.5% to $2.73 on the news.
The context: Cleanaway said the acquisition was highly complementary as it expanded its collections business and solid waste services infrastructure network in Melbourne.
Citywide provides services to 1,500 municipal, industrial and commercial consumers in Melbourne while the transfer station receives 200,000 tonnes of waste and recycling material annually.
The company noted the acquisition would not make a significant earnings contribution in FY25, but earnings contribution on an integrated basis was significant and expected to grow.
The source: ASX announcement
