Australia's Transpacific Industries, which this year swallowed local firm Waste Management, has failed in its bid to buy competitor Cleanaway.
Industrial conglomerate Brambles announced yesterday that it had sold its Cleanaway Australia and New Zealand and Industrial Services Australia business to an affiliate of US private equity firm Kohlberg Kravis
Roberts for A$1.83 billion ($2.19 billion) in cash.
Waste Management had itself wanted to buy Cleanaway, but after its board and management decided it was not large enough to achieve the transaction alone, the company agreed to be taken over by Transpacific.
Shares in Transpacific yesterday fell A82c to close at A$7.
Transpacific said in a statement it would now focus on other growth opportunities.
"While it may take longer to achieve than if we had been successful in acquiring Cleanaway, our approach of growth through organic opportunities and acquisitions is likely to be more accretive to shareholders over the medium to long term," the statement said.
Fisher Funds chief investment officer Warren Couillault, who had been a critic of the Transpacific takeover of Waste Management, said part of the logic for that transaction had been Waste Management's belief there would be a consolidation of the waste industry after the Cleanaway sale.
But with Cleanaway sold to a private equity buyer and not a competitor, "at least at the first cut some of that logic doesn't look to have come through".
