Cleanaway Waste Management (ASX: CWY) has won the bid to acquire SKM Recycling Group for $66 million.
The sale follows a public process conducted by KordaMentha who were appointed the receivers of SKM in August.
Cleanaway will become owner of all SKM properties, plants, equipment and other assets after completion of the acquisition which is expected to occur before the end of October.
CEO and managing director Vik Bansal says the recycling sector is undergoing significant structural changes as Australia transitions to support a more circular economy.
"The acquisition provides us with the infrastructure to capitalize on the growth opportunities created by these changes," says Bansal.
Five recycling sites, three material recovery facilities, a transfer station in Victoria and a material recovery facility in Tasmania are part and parcel in the buyout.
However, before the newly acquired business is once again running full tilt, Cleanaway needs to sift through a bit more trash.
Since SKM fell into receivership, Bansal says substantial work has been done to clear waste stockpiles from the sites in preparation for the takeover.
"Significant progress has been made in clearing waste stockpiles from the sites, repairing plant and equipment and bringing the sites to required safety, environmental and operational standards," says Bansal.
"We expect to gradually restore operations in Victoria over the coming months to provide councils with a quality, sustainable solution for their recycling," he adds.
"The acquisition provides Cleanaway with a strong recycling platform in Victoria and Tasmania as part of our 'footprint 2025' strategy and our mission of making a sustainable future possible."
At the time of writing (11:50pm AEDT), CWY shares are trading up 6.25 per cent at $2.04.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support