CVC Capital Partners and Kohlberg Kravis Roberts plan to break up Dutch waste management business Van Gansewinkel as the pair looks for ways to sell the debt-stricken business, according to a source familiar with the matter.
KKR and CVC are expected to try and sell AVR, the waste handler part of the business, for roughly €1 billion to a strategic buyer or to a private equity infrastructure fund, as first reported by Dutch financial daily Het Financieele Dagblad. Sources told the paper the rationale for the break-up was to get some liquidity from the business, which is carrying some €1.5 billion in debt on the books.
By the end of March 2014, some of Van Gansewinkel’s term loans with a combined value of €175.5 million will expire, including a term loan A of €70.8 million, a term out loan of €44.4 million and a revolving credit facility of €17.9 million. A term B loan, worth €42.4 million will expire at the same time, according to the company’s 2011 financial report.
The two buyout firms bought waste collection company AVR in March 2006 for €1.4 billion, PEI reported at the time. In 2007 they merged larger competitor Van Gansewinkel and AVR to create one of Europe’s largest waste management businesses. CVC and KKR reportedly used large amounts of leverage to acquire the company.
CVC and Van Gansewinkel declined to comment. KKR was unable to respond to a request for comment at press time.