TRANSPACIFIC Industries Group Ltd (ASX:TPI) has finalised its purchase of the Melbourne Regional Landfill business from Boral Ltd.
The Brisbane-based waste management company agreed to buy the business for $150 million in December 2014, plus $15 million in site preparation and annual royalties.
The acquisition is expected to secure TPI's long term position in Melbourne and overall growth strategy by boosting the company's internalisation rates rather than delivering to third parties.
TPI will close its current landfill operations in Melbourne by FY16, with the enhanced cash flow anticipated to be earnings per share accretive in FY17.
Transpacific CEO Robert Boucher says the transaction with Boral is about increasing returns by processing more waste at the company's own sites.
"For Boral, landfill is not a core business, whereas Transpacific needs strategic landfill capacity in order to increase our internalisation rates," Boucher says.
"This partnership will also allow us the potential to evaluate future landfill opportunities with Boral in other Australian states, so this is a true win-win situation for both sets of shareholders."
As a result of the deal, TPI's internalisation rate in the city is expected to lift from 25 per cent to 65 per cent.
*Please note: Transpacific Industries Group (ASX:TPI) completed a changed of name to Cleanaway Waste Management (ASX:CWY) on July 1, 2016
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