Cleanaway (CWY): EQT agrees an A$9.3bn takeover at A$3.095 a share for Australia's biggest waste company
Swedish investment firm EQT has signed a binding deal to buy Cleanaway, Australia's largest integrated waste company, for A$3.095 in cash per share, valuing the business at about A$9.3bn including debt. Cleanaway's board unanimously backs the deal, and its shares jumped about 20% in Sydney on 19 October. Completion is expected by the end of March 2027.
What happened
On 19 October 2026 EQT Infrastructure VI, a fund run by the Swedish investment group EQT, announced that it had signed a binding scheme implementation deed to buy 100% of Cleanaway Waste Management (ASX: CWY). A scheme of arrangement is the usual Australian route for a takeover: shareholders vote, a court approves, and if both agree every share is transferred to the buyer. The price is A$3.095 in cash per share, less any dividends paid before the deal completes. Cleanaway's board unanimously recommends that shareholders vote in favour, provided no better offer appears and an independent expert concludes the deal is in shareholders' best interests.
The deal follows a public process. On 13 August 2026 Cleanaway disclosed an earlier, non-binding proposal from EQT at A$3.13 a share, after an initial unsolicited approach at A$3.00, and gave EQT up to nine weeks of exclusive access to check the company's books. The gap between A$3.13 and A$3.095 is not a price cut: Cleanaway's own results document says the A$3.13 proposal is reduced by the cash amount of the dividend to A$3.095, and that dividend is the 3.5 cent final dividend paid on 8 October 2026 (3.13 minus 0.035 equals 3.095). EQT says shareholders need take no action yet; a scheme booklet with the expert's report and the vote details will follow.
The numbers, explained
All amounts are Australian dollars. EQT states that A$3.095 is a 32.1% premium to Cleanaway's closing price of A$2.37 on 12 August 2026, the last trading day before the company first told the market about a possible deal. Our check: 3.13 divided by 2.37 is 1.3207, a 32.1% premium, so EQT's figure is measured on the earlier A$3.13; on A$3.095 itself the premium is 30.6% (3.095 divided by 2.37 is 1.3059). The enterprise value, meaning the price of all the shares plus the company's debt, is about A$9.3bn. Our working from the figures EQT and Cleanaway publish: 2,255.1m fully diluted shares multiplied by A$3.095 is about A$6.98bn; adding net debt of A$2,288.7m (30 June 2026) and A$1.6m of minority interests gives about A$9.27bn.
Cleanaway's results for the year to 30 June 2026, published on 20 August, show what the buyer is paying for. Net revenue (sales excluding landfill levies, which are pass-through government charges) rose 13.1% to A$3,736.7m. Underlying EBIT, the profit before interest and tax with one-off items removed, rose 14.2% to A$470.2m from A$411.8m. Underlying EBITDA, the same measure before depreciation and amortisation (the yearly accounting charge for wearing out trucks, plants and acquired customer contracts), rose 12.8% to A$892.6m from A$791.3m. Dividing A$9.27bn by those figures gives about 19.7 times EBIT and 10.4 times EBITDA (our calculations; Cleanaway and press coverage round the first to about 20 times). Reported profit after tax fell 37.2% to A$98.5m because of A$124.6m of one-off costs, including impairments and closure costs at old construction-and-demolition sites. Underlying profit after tax, the company's own non-IFRS measure, rose 13.6% to A$223.1m. Net debt rose 31.8% to A$2,288.7m (2,288.7 divided by 1,736.6); the company-defined leverage ratio, borrowing relative to earnings, was 2.27 times against 1.85 times.
Why it matters
Cleanaway makes money by collecting rubbish from homes, councils and businesses, and by charging to sort, treat, recycle and bury it. Its biggest division, Solid Waste Services, earned A$405.0m of EBIT on A$2,506.4m of net revenue in the year, a 16.2% margin (405.0 divided by 2,506.4), against 15.8% a year earlier. The company said its contract pricing let it recover most of this year's higher fuel costs. Its Environmental and Technical Solutions division, which handles industrial cleaning, oils and health-care waste, is more uneven: its Contract Resources and Industrial Services arm, helped by the Contract Resources acquisition, grew net revenue 76.9% to A$669.7m, while the oils and health-services arm saw EBIT fall 10.7% to A$75.1m.
For shareholders, a cash price ends the risk of future share-price swings and, for those who can use them, adds tax credits. Cleanaway may pay up to about A$0.19 a share of further dividends before completion, including a possible fully franked special dividend (one carrying Australian company-tax credits that eligible holders can use), and any such payment is deducted from the price, according to ABC News and Motley Fool Australia. For the sector, the deal shows that large infrastructure investors will pay about 20 times annual EBIT for stable, hard-to-replicate waste networks. ABC's market report shows Cleanaway shares closing 20.2% higher on the day.
What to watch next
The deal still needs several approvals. According to EQT and Cleanaway, these are shareholder approval, approval of the Federal Court of Australia, and regulatory clearances; the August announcement named the Foreign Investment Review Board and the competition regulator, the ACCC. Motley Fool Australia adds that authorities in Kuwait and Saudi Arabia must also clear it, which reflects Cleanaway's Middle East work; we did not find that in EQT's release. The same article says the shareholder vote is expected before the end of February 2027. EQT expects the deal to complete by the end of March 2027, and a small daily ticking fee of A$0.0002 per share is added to the price if completion slips past 31 May 2027.
Other dated items: Cleanaway has said it expects underlying EBIT of A$500m to A$530m in the 2027 financial year (a company forecast, not ours), which is 6.3% to 12.7% above the A$470.2m just reported (500 divided by 470.2 and 530 divided by 470.2). The scheme booklet, with the independent expert's verdict, comes before any vote, and any further dividends will change the final cash price. The deal can still fail if the expert disagrees, a rival bid appears, or a regulator objects. We make no forecast about any of these.
- Scheme of arrangement: an Australian takeover route where shareholders and a court approve the buyer taking over all shares.
- Enterprise value: the value of a company's shares plus its net debt.
- Underlying EBIT: profit before interest and tax with items the company treats as one-off removed (not an IFRS figure).
- Franked dividend: a dividend that carries Australian company-tax credits for eligible holders.
Sources
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