A trio of City firms have bagged roles on the proposed £1.2bn take-private of waste collection company Biffa.
The board of Biffa, which was spun out of water company Severn Trent in 2006, today (8 February) announced that it had reached an agreement with a group led by private equity houses Montagu Funds and Global Infrastructure Partners (GIP).
Biffa, which collects rubbish from more than a million UK households, turned to Herbert Smith for advice on the transaction with corporate partners Stephen Wilkinson and Alan Montgomery leading.
Linklaters acted on behalf of the private equity consortium in addition to providing separate advice to long-standing client Montagu. Private equity partner Richard Youle headed the Linklaters team with banking partner Adam Freeman having input on the debt side.
Although GIP has used Linklaters regularly in the past, on this bid it received separate advice from Slaughter and May partner Mark Horton.
According to Wilkinson the deal is significant in the current climate given the fact that private equity transactions of this size are becoming increasingly rare.
“It is a private equity bid that is worth more than £1bn. That’s quite unusual at the moment,” he said.
Linklaters partner Youle pointed out that Biffa’s business model makes it attractive for investment. “Biffa is at the more attractive end of the market. It has got resilient infrastructure-type qualities,” he said.
Herbert Smith has represented Biffa since its demerger from Severn Trent while Montagu and GIP are also established clients of Linklaters. The firm helped Montagu pick up software broker Open International for £276m last year and acted for GIP on the acquisitions of London City Airport and Great Yarmouth Port.
On the current deal Shearman & Sterling is acting for the financial advisors while Lovells is advising the lending banks.
While Biffa’s board has agreed the takeover, the £3.50 a share offer is subject to shareholder approval and another bidder could yet emerge. Last year a joint bid from Montagu and HgCapital, which offered £3.25 a share, was rejected by Biffa. GIP stepped into the void when HgCapital dropped out of the running.