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Bingo receives green light from ACCC for Dial A Dump acquisition

Bingo Industries has welcomed the Australian Competition and Consumer Commission’s (ACCC) announcement that it would not oppose Bingo’s proposed acquisition of Dial A Dump Industries (DADI).

It comes after Bingo accepted a court-enforceable undertaking from ACCC to divest its recycling facility in Banksmeadow, New South Wales.

Earlier this year, Bingo offered to sell its Banksmeadow processing plant to ease ACCC competition concerns regarding its $578 million purchase of Dial-a-Dump.

In August last year, Bingo announced it intended to acquire fully integrated NSW waste and recycling business Dial A Dump Industries for $577.5 million.

The acquisition includes its Genesis Transfer Station in Alexandria, Genesis Waste Facility (landfill, materials processing facility, and recycled products processing facility) at Eastern Creek and a collections fleet of 55 vehicles.

Bingo Managing Director and CEO, Daniel Tartak, said the ACCC decision was an important step in realising the company’s vision and five-year strategy to be a fully vertically integrated business and diversify into new markets in NSW.

“Our acquisition of DADI will not only be transformational for BINGO, but also for recycling in the greater Sydney region.

“Our development of a Recycling Ecology Park at Eastern Creek will allow us to process and recycle every type of waste, accelerate our vertical integration and compete more effectively with the larger local and international players.

“The ability to further consolidate more of our recycling, processing, distribution and landfill at a single site will deliver significant economic benefits. It allows us to further grow waste volumes, by freeing up space across our network of resource recovery facilities, some of which can be better utilised as transfer stations,” he said.

DADI is a fully integrated recycling and waste management services provider in NSW. DADI has operations across the waste value chain from collections to recycling, landfill and recycled product sales. The principal asset is the waste management and resource recovery facility at Eastern Creek that spans approximately 55 hectares and is located in the Western Sydney growth precinct. It has an approved capacity of up to two million tonnes per annum between its resource recovery facility and landfill, and approximately 15 years of remaining landfill life.

Bingo expects to achieve run-rate cost synergies of around $15 million per annum through internalisation of waste volumes, operational efficiencies, and rationalisation of overheads over a two-year period.

ACCC clearance satisfies a condition precedent relating to the acquisition of DADI, and transaction settlement is expected to occur in March 2019.

“This will help ensure our vision for a more sustainable Sydney is realised, as we push for a waste-free Australia and move to build a circular economy through diverting waste from landfill,” said Tartak.

“It will provide our customers with a better and more sustainable solution for both building and demolition and commercial and industrial waste,” he said.

Bingo announced that the board has approved the implementation of an on-market buy-back of up to $75 million of its ordinary shares.

As foreshadowed in Bingo’s half year results announcement, Bingo’s strong balance sheet together with the current trading value of Bingo shares supports the buy-back as a capital management initiative.

The buy-back is expected to commence on 15 March 2019 and will end 12 months from the date of this announcement.

The timing and number of shares purchased under the on-market buy-back will be contingent on Bingo’s share price and prevailing market conditions.

(Image: Bingo Managing Director and CEO, Daniel Tartak.)

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