brambles - lots of competition..

REF: http://www.finance.news.com.au/story/0,10166,18360437-14334,00.html

Brambles to clean up with cash for trash
From:
By Robert Clow

March 06, 2006

PRIVATE equity investors are gearing up for one of the most competitive auctions in Australian history when Brambles puts its $1 billion-plus Cleanaway and Industrial Services divisions on to the block in the next few weeks.
Brambles (bil.ASX:Quote,News) is expected to release a confidentiality agreement to prospective buyers of Cleanaway this week, with an information memorandum due out next week.

In the meantime, leveraged buyout firms are jockeying frantically for position before the sale. The two companies together are estimated to be worth 1.1-$1.3 billion.

Although the figure would be too large for many domestic private equity groups working alone, they are both ideal private equity targets -- fuelling expectations that bidders will take the form of syndicates and joint ventures.

Cleanaway is a waste management company, while Industrial Services is an outsourcing business offering maintenance services to large mining and steel sites. Both companies generate long-term, stable cash flows, which private equity firms can easily borrow against. They are also both in growth industries.

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Champ has already said it will team up with waste management firm Transpacific Industries. CVC Asia Pacific also plans to join with Ironbridge Capital for the bid, reprising a partnership that was successful in the acquisition of Affinity Health.

Meanwhile, Archer Capital and the Carlyle Group are also understood to be looking for partners.

Affinity Capital, CCMP Capital, Newbridge Capital and Pacific Equity Partners look likely to bid on their own. Affinity, CCMP and Newbridge are all regional funds with deep pockets, while PEP has just raised Australia's largest private equity fund, which is $1.2 billion in size.

Catalyst Investment Managers, which has historically been one of Australia's most active funds, will not be part of the auction. After a falling out with Britain's Prudential, which was Catalyst's parent, Catalyst professionals are now striking out on their own to raise a new $350 million fund.

Nor does the competition end there. In a deal that one private equity professional said was likely to be a "bunfight", a host of trade buyers are also expected to throw their hats into the ring.

Transpacific reaffirmed its interest in the Cleanaway group at its recent results briefing, but Transfield Services, United Group, Leighton and Downer are all expected to surface during the course of what promises to be a ferocious auction.

Not all of the bidders will be interested in both companies, though some of the private equity firms are preparing bids on both.

Trade buyers have traditionally been difficult for private equity buyers to beat in auctions because they can usually extract synergies from the business they are seeking to acquire. Private equity firms were trumped in the recent Taverner bid when pubs operator Bruandwo, which is jointly owned by Woolworths and Bruce Mathieson, waited until the last moment to swoop on the asset.