CVC and KKR lose Van Gansewinkel

Having tried to sell the waste business last year, the firms handed it to creditors this week

CVC Capital Partners and KKR have handed over Dutch waste management business Van Gansewinkel Group to creditors as part of a debt restructuring agreement, according to a statement from Van Gansewinkel.

Under the terms of the restructuring the company’s creditors will write off 60 percent of the debt, reducing it from around €809 million to €320 million.

In 2014 Van Gansewinkel’s turnover dropped to €962 million, from just over €1 billion in 2013, and EBITDAE dropped from €124 million in 2013 to €99 million. Van Gansewinkel said this was “mainly caused by fierce price pressure on both sides of our value chain, both on the collection side as well as on the raw materials side”, adding that the firm’s market share “remained stable”.

Overall Van Gansewinkel posted a loss of €549 million last year, mainly as a result of a €488 million goodwill write-off dating back to its acquisition by CVC and KKR in 2007.

“The recapitalisation provides our company with a solid foundation for its ambitions and plans, and, with the implementation of a new, right-sized capital structure, enables us to make the investments required to ensure it has a strong future,” Van Gansewinkel CEO Marc Zwaaneveld said in a statement. “I am pleased that all parties involved acted responsibly and professionally, reflecting Van Gansewinkel’s heritage, qualities and capabilities.”

CVC and KKR bought Eindhoven-based Van Ganswinkel in 2007, merging it with Rotterdam-based waste management business AVR, which they had acquired in March 2006 in a deal worth €1.4 billion. The combined acquisition price of the two businesses was €2.2 billion. According to Dutch newspaper Financieele Dagblad, €1.8 billion of this was debt.

In 2013 KKR and CVC sold AVR for €944 million, and in September last year they hired Credit Suisse to run the sales process for Van Gansewinkel. 

“Since 2007 we have supported the company in delivering market-leading services as well as dealing with challenging macro-economic headwinds,” KKR said in an emailed statement. “As the CEO indicates, we also have been supportive to the management in coming to an agreement on the new capital structure.”

Van Gansewinkel collects waste of more than 100,000 companies and 2.0 million households. It now operates in The Netherlands, Belgium, Luxembourg, Germany, France, Portugal, Czech Republic, Poland and Hungary. During the ownership period of the two buyout firms, the company invested €900 million in capital expenditure. For the €95 million add-on acquisition of Veolia in Belgium, KKR and CVC provided extra funding, PEI reported previously.

Van Gansewinkel also developed its recycling capabilities. In 2013, more than 93 percent of processed waste was given a second life: 62 percent as raw material and 30 percent as (green) energy, PEI reported earlier.

CVC did not return requests for comment at press time.