Envirowaste’s owner testing water for sale to Orix Corp

WASTE management firm EnviroWaste could go for a healthy price if the sale of an Australian counterpart is any indication.

EnviroWaste’s owner, Ironbridge Capital, yesterday denied it was in advanced negotiations with Japan’s Orix Corporation.

The company’s chairman, Kim Ellis, said the Australian media report was ‘‘a load of bollocks’’ and that the formal sale process had not yet begun.

He said the company had been waiting to see the outcome of the sale of Australian counterpart Thiess Waste Management, which earlier this month was sold to German trade buyer Remondis AG and Co KG for A$218m (NZ$282m).

Ellis confirmed the target price range for EnviroWaste was between $400m and $500m, well above the $365m its owners paid for it in 2006.

‘‘There’s no formal valuation but that’s certainly what we’ll be seeking.’’

He virtually ruled out an IPO, saying it was ‘‘more than unlikely’’.

A market source said people had been ‘‘pleasantly surprised by the price paid for Thiess and it could bode well for EnviroWaste’’.

Remondis had paid 10 times Thiess’ last ebit (earnings before interest and tax) and six times its ebitda (earnings before interest, tax, depreciation and amortisation).

EnviroWaste was generally regarded as well-run and Ellis had a good track record, the source said.

‘‘There is plenty of demand for these assets as long as they’re in good order.’’

Ironbridge, a Sydney-based private equity firm, said Macquarie Capital was still undertaking a strategic review of the company for sale.

Ellis said the sale was being investigated largely because Ironbridge had held EnviroWaste for some time and felt now was the time to test the market.

Orix, which has mostly car leasing operations in New Zealand, reportedly has a waste management business in Japan.