Key Highlights

  • Cleanaway Waste Management agreed to an AUD 9.3 billion enterprise-value Takeover by EQT Infrastructure.
  • The proposed transaction offers AUD 3.095 cash per share, subject to Dividend adjustments.
  • FY26 underlying EBIT increased 14.2% to AUD 470.2 million, supported by operating improvements.
  • Cleanaway expects FY27 underlying EBIT of AUD 500 million to AUD 530 million.

Cleanaway Waste Management Limited (ASX:CWY), one of Australia's largest integrated waste management and resource recovery companies, has entered into a binding agreement to be acquired by EQT Infrastructure through a transaction implying an Enterprise value of approximately AUD 9.3 billion. The proposed Acquisition follows a year of higher underlying earnings, Revenue growth and improved free Cash Flow for Cleanaway. The company's board has unanimously recommended the transaction, subject to the absence of a superior proposal and an independent expert continuing to determine that the scheme is in shareholders' best interests.

The agreement, announced on 18 October 2026, involves EQT Infrastructure VI acquiring all issued Cleanaway shares through a scheme of arrangement.

Under the proposed terms, Cleanaway shareholders would receive AUD 3.095 in cash per share, subject to adjustments for any further dividends or distributions paid before implementation.

The acquisition comes as Cleanaway continues implementing its Blueprint 2030 2.0 strategy, which focuses on operational efficiency, organic Earnings growth and improved returns from its existing infrastructure network.

Meanwhile, the company has maintained FY27 underlying earnings before interest and tax (EBIT) guidance of AUD 500 million to AUD 530 million.

Completion of the acquisition remains subject to regulatory approvals, Shareholder approval and satisfaction of other transaction conditions.

Understanding Cleanaway's Integrated Waste Management Business

Cleanaway operates an integrated waste management and resource recovery network across Australia, providing essential services to households, businesses, local councils and industrial customers.

Its operations include waste collection, recycling, treatment, resource recovery and disposal services.

The company's Solid Waste Services division manages municipal, commercial and industrial waste collection, alongside recycling facilities, transfer stations and landfill operations.

These services are supported by long-term customer contracts and infrastructure Assets across multiple Australian states.

Cleanaway also operates Environmental and Technical Solutions businesses, which provide specialised waste treatment and industrial services.

These activities include liquid waste management, hazardous waste treatment, used-oil processing, industrial cleaning and healthcare waste services.

The company's recycling operations support the recovery of materials such as plastics, paper, metals and other recyclable products.

Cleanaway generates revenue through waste collection fees, processing charges, disposal services and contractual arrangements with government and commercial customers.

Operating profitability depends on waste volumes, pricing arrangements, labour expenses, fuel costs, Facility utilisation and regulatory requirements.

The essential nature of waste collection and treatment services provides recurring Business activity, although individual divisions remain exposed to economic conditions and customer demand.

How the EQT Acquisition Proposal Developed

Cleanaway's engagement with EQT Infrastructure began in August 2026.

On 13 August, the company disclosed that it had received a non-binding indicative proposal from EQT to acquire all its issued shares.

The initial proposal involved cash consideration of AUD 3.13 per share.

Following consideration of the indicative terms, Cleanaway entered into a transaction process deed with EQT.

This arrangement provided a period of exclusive due diligence, allowing EQT to review financial, operational and other relevant information.

During September, the parties continued negotiations concerning the proposed transaction.

The exclusivity period subsequently ended in accordance with the transaction process arrangements.

EQT indicated that its Due Diligence had not identified matters requiring it to withdraw or reduce its indicative proposal.

Discussions continued towards negotiating a binding scheme implementation deed.

On 18 October 2026, Cleanaway announced that it had entered into a binding agreement with an EQT-controlled acquisition entity.

The final cash consideration was set at AUD 3.095 per share, reflecting the deduction of Cleanaway's FY26 final dividend of 3.5 cents per share from the original AUD 3.13 proposal.

The transaction implies an enterprise value of approximately AUD 9.3 billion, including the company's Equity value and relevant debt-related obligations.

What the Proposed EQT Transaction Means for Cleanaway

The proposed acquisition would result in EQT acquiring 100% of Cleanaway's issued ordinary shares.

If implemented, Cleanaway would become privately owned and would no longer remain listed on the Australian Securities Exchange.

The transaction is structured as a scheme of arrangement, a legal process requiring approval from eligible shareholders and the Federal Court of Australia.

Cleanaway's directors have unanimously recommended that shareholders vote in favour of the scheme.

However, this recommendation is conditional on no superior proposal emerging and the independent expert concluding, and continuing to conclude, that the transaction is in shareholders' best interests.

The transaction provides a proposed cash consideration structure rather than continued ownership in the company's future operations.

Cleanaway's existing operating strategy remains relevant until the acquisition is completed.

The company continues managing waste collection, recycling and industrial services while progressing its FY27 business priorities.

EQT has indicated that it intends to support Cleanaway's next phase of development through Investment in waste management infrastructure, resource recovery and operational improvements.

The eventual ownership change will depend on obtaining the necessary approvals and completing the transaction.

Dividend Arrangements Under the Proposed Acquisition

Cleanaway's acquisition agreement includes provisions allowing the company to pay dividends before completion.

The board may declare dividends of up to 19 cents per share in aggregate before implementation, subject to the relevant conditions.

Cleanaway has indicated that it currently expects pre-implementation dividends within a range of 14.5 cents to 19 cents per share.

These could include a fully franked special dividend, depending on the company's financial position and available franking credits.

However, any dividends paid before implementation would reduce the scheme cash consideration by an equivalent amount.

For example, if Cleanaway pays a pre-implementation dividend of 19 cents per share, the cash consideration under the scheme would decrease from AUD 3.095 to AUD 2.905 per share.

The total cash amount received through the dividend and adjusted scheme consideration would therefore remain AUD 3.095 per share, before considering any individual tax implications or franking benefits.

The eventual dividend arrangements will depend on board decisions and the applicable transaction conditions.

The company has not committed to paying the maximum permitted amount.

FY26 Financial Results Reflect Revenue and Earnings Growth

Cleanaway reported net revenue of AUD 3,736.7 million for the financial year ended 30 June 2026.

This represented an increase of 13.1% compared with AUD 3,302.7 million in FY25.

Gross revenue increased by 13.5% to AUD 4,371.3 million, compared with AUD 3,850.7 million in the preceding financial year.

Revenue growth was supported by the contributions from Contract Resources and Citywide Waste, alongside activity across Cleanaway's existing waste management operations.

Underlying earnings before interest, tax, Depreciation and Amortisation (EBITDA) increased by 12.8% to AUD 892.6 million, compared with AUD 791.3 million in FY25.

Underlying EBIT increased by 14.2% to AUD 470.2 million from AUD 411.8 million.

The underlying EBIT Margin improved by 10 basis points to 12.6%.

Underlying net profit after tax increased by 13.6% to AUD 223.1 million, compared with AUD 196.4 million in FY25.

However, statutory net profit after tax declined by 37.2% to AUD 98.5 million.

The reduction reflected significant and non-recurring expenses recognised during the financial year.

These expenses totalled approximately AUD 124.6 million after tax and included restructuring, Impairment and other adjustments.

The difference between underlying and statutory profitability highlights the financial impact of the company's ongoing transformation activities.

Solid Waste Services Remains the Largest Earnings Contributor

Cleanaway's Solid Waste Services division continued contributing the largest portion of group operating earnings during FY26.

The division reported net revenue of AUD 2,506.4 million, representing growth of 6.4% compared with AUD 2,356.6 million in FY25.

Underlying EBIT increased by 9.1% to AUD 405.0 million from AUD 371.2 million.

The EBIT margin improved by 40 basis points to 16.2%.

The improvement reflected higher revenue from waste collection, landfill activities and recycling-related services.

Contractual pricing adjustments helped recover increases in selected operating costs, including fuel expenses.

The division also benefited from labour productivity initiatives and changes to fleet management.

Cleanaway's national Container Deposit Scheme operations contributed to activity during the financial year.

These programmes support the collection and recovery of eligible beverage containers through established recycling infrastructure.

The company's landfill assets also remained important contributors to operating earnings.

Landfill facilities provide waste disposal capacity for municipal and commercial customers, although they require ongoing investment in environmental management and regulatory compliance.

Cleanaway continues focusing on improving the utilisation of its existing infrastructure and expanding customer relationships across Solid Waste Services.

Contract Resources Acquisition Contributes to Earnings Growth

Cleanaway's Contract Resources and Industrial Services division recorded increased revenue and profitability during FY26.

Net revenue rose by 76.9% to AUD 669.7 million, compared with AUD 378.5 million in FY25.

Underlying EBIT increased by 134.9% to AUD 55.9 million from AUD 23.8 million.

The division's EBIT margin improved to 8.3%, compared with 6.3% in the preceding financial year.

A significant contributor was the acquisition of Contract Resources.

The acquired business generated revenue of approximately AUD 319.8 million during its first 11 months under Cleanaway's ownership.

Contract Resources delivered EBIT of AUD 36.1 million, excluding integration synergies.

This represented an EBIT margin of approximately 11.3%.

The business also recorded EBITA of AUD 41.4 million, representing a margin of 12.9%.

Contract Resources provides specialised industrial maintenance and cleaning services to customers across energy, resources and industrial markets.

Activity increased among major customers in Australia and New Zealand during FY26.

However, reduced project activity in the Middle East partly offset the improvement.

Cleanaway continues integrating Contract Resources into its broader industrial services operations while focusing on operational efficiency and customer demand.

Health Services and Technical Operations Face Operating Pressure

Not all Cleanaway divisions recorded higher earnings during FY26.

The Oils and Technical Services and Health Services businesses experienced lower profitability.

Combined net revenue declined by 1.2% to AUD 676.0 million, compared with AUD 684.2 million in FY25.

Underlying EBIT decreased by 10.7% to AUD 75.1 million from AUD 84.1 million.

The EBIT margin declined by 120 basis points to 11.1%.

The reduction reflected lower healthcare waste volumes, operating challenges and changes in customer activity.

Health Services experienced reduced contributions from selected contracts and continued adjusting its operating arrangements.

Within Industrial Services, project deferrals and fewer maintenance shutdowns also affected utilisation and profitability.

Lower equipment and workforce utilisation can influence margins because certain operating costs remain even when project volumes decline.

Cleanaway is implementing operational changes to improve performance across these businesses.

These include site rationalisation, changes to operating processes and a greater focus on contract profitability.

Management expects improvements across Oils and Technical Services, Health Services and selected industrial operations to contribute to FY27 earnings.

Free Cash Flow Increases 63.7% During FY26

Cleanaway reported free cash flow of AUD 213.8 million during FY26, compared with AUD 130.6 million in FY25.

This represented an increase of 63.7%.

The improvement reflected higher underlying earnings, Working Capital Management and changes to fleet financing arrangements.

Free cash flow benefited from approximately AUD 40.2 million associated with revised fleet payment terms.

This contribution should be distinguished from recurring operating cash generation because it relates to changes in payment timing.

Total capital expenditure, including non-cash leases, reached AUD 374.3 million during FY26, compared with AUD 382.0 million in FY25.

The company continues investing in waste collection vehicles, recycling infrastructure, processing facilities and environmental management.

Cash generation remains important because waste management operations require ongoing expenditure on equipment, maintenance and regulatory compliance.

Cleanaway's Blueprint 2030 2.0 programme includes initiatives intended to improve the conversion of earnings into free cash flow.

The company is also focusing on capital allocation and the performance of existing infrastructure assets.

Net Debt Increases Following Acquisitions

Cleanaway's net debt increased to approximately AUD 2.29 billion at 30 June 2026.

The increase reflected acquisition activity, Capital Investment and other financing requirements.

The group's Leverage Ratio rose to 2.27 times, compared with 1.85 times in FY25.

Leverage measures debt relative to earnings and provides an indication of financing obligations.

Cleanaway's capital requirements are influenced by its acquisition strategy and the infrastructure-intensive nature of its operations.

Waste collection, recycling and treatment activities require investment in vehicles, processing equipment, waste facilities and related assets.

The acquisition of Contract Resources expanded the company's industrial services operations while increasing its financing requirements.

Cleanaway continues focusing on earnings growth and cash generation to support debt management.

Under the proposed EQT transaction, the acquisition structure and financing arrangements would be managed through the buyer's transaction framework.

The scheme is not conditional on EQT obtaining acquisition financing.

Dividend Payments Increase During FY26

Cleanaway declared a fully franked final dividend of 3.5 cents per share for FY26.

This brought total annual dividends to 6.85 cents per share, compared with 6.0 cents in FY25.

The increase represented growth of approximately 14.2%.

Total dividends represented approximately 68.8% of underlying net profit after tax.

The final dividend was paid on 8 October 2026.

The payment was also reflected in the adjustment from EQT's original indicative acquisition proposal of AUD 3.13 per share to the binding scheme consideration of AUD 3.095 per share.

The company may also declare additional dividends before implementation of the proposed transaction, subject to the relevant conditions.

Any such distributions would reduce the scheme cash consideration by an equivalent amount.

Cleanaway's capital management decisions will therefore remain linked to the transaction timetable and the company's financial requirements.

Blueprint 2030 2.0 Remains Central to Operational Development

Cleanaway continues implementing its Blueprint 2030 2.0 strategy to improve operating performance and financial returns.

The programme focuses on generating additional value from the company's existing waste management infrastructure.

Key priorities include customer growth, pricing, productivity, fleet utilisation and operational efficiency.

The company is also improving the integration of its national waste collection and processing network.

Centralised sales and fleet management are intended to improve resource allocation and reduce operational complexity.

Technology investment represents another important component of the strategy.

Cleanaway is progressing information technology upgrades and changes to internal systems to support operational coordination.

These initiatives are expected to involve near-term expenditure, with potential efficiency benefits developing over time.

The company is also focusing on improving returns from its recycling, waste processing and industrial services businesses.

However, the eventual financial contribution will depend on implementation progress and the performance of individual operating divisions.

The proposed ownership change does not remove the importance of these initiatives while Cleanaway continues operating independently.

FY27 Underlying EBIT Guidance Indicates Further Earnings Growth

Cleanaway has provided FY27 underlying EBIT guidance of AUD 500 million to AUD 530 million.

This compares with actual underlying EBIT of AUD 470.2 million during FY26.

At the midpoint of AUD 515 million, the guidance implies an increase of approximately 9.5%.

The outlook reflects expected growth in Solid Waste Services, improvements in Environmental and Technical Solutions and further contributions from Contract Resources.

Within Solid Waste Services, management expects collection-related growth supported by centralised sales and fleet management initiatives.

Environmental and Technical Solutions is expected to benefit from a recovery in Oils and Technical Services and Health Services.

Contract Resources is also expected to contribute to earnings, with improved activity anticipated in the Middle East.

However, FY27 will include additional costs associated with technology investment and the implementation of Blueprint 2030 2.0.

Cleanaway expects depreciation and amortisation expenses of AUD 435 million to AUD 455 million.

Cash Capital Expenditure is projected at approximately AUD 360 million, while cash interest payments are expected to reach approximately AUD 140 million.

The company also expects landfill remediation expenditure of approximately AUD 180 million over FY27 to FY29.

The cash impact of FY27 information technology transformation costs is estimated at AUD 40 million to AUD 50 million.

These expenditures will influence free cash flow as the company continues investing in operational improvements.

Regulatory Approvals Remain Essential to EQT Transaction Completion

The proposed acquisition remains subject to several regulatory and legal conditions.

These include approval from Australia's Foreign Investment Review Board and competition clearance from the Australian Competition and Consumer Commission.

The transaction also requires relevant competition approvals in Kuwait and Saudi Arabia.

These additional jurisdictions are relevant to Cleanaway's international industrial services operations.

The acquisition will also require approval from eligible Cleanaway shareholders at a scheme meeting.

Following the shareholder vote, the transaction must receive approval from the Federal Court of Australia.

Kroll Australia has been appointed as the independent expert to assess whether the scheme is in shareholders' best interests.

The expert's report is expected to be included in the scheme booklet.

The board's recommendation remains conditional on the independent expert supporting the transaction and no superior proposal emerging.

Completion will depend on satisfying these requirements and other conditions under the scheme implementation deed.

Expected Acquisition Timetable Extends Into March 2027

Cleanaway and EQT are progressing the transaction towards implementation during the first quarter of calendar 2027.

The scheme booklet is expected to be distributed during December 2026.

The document will contain additional details concerning the transaction, including the independent expert's assessment and the proposed timetable.

The shareholder scheme meeting is expected to occur before the end of February 2027.

Subject to approvals, implementation is targeted for the end of March 2027.

The agreement includes an end date of 1 September 2027, subject to applicable extension provisions.

A ticking fee mechanism may apply if implementation occurs after 31 May 2027.

Under this arrangement, additional consideration of AUD 0.0002 per share per day may become payable for the relevant delay period, subject to the transaction terms.

The scheme implementation deed also includes break fee provisions.

Cleanaway may be required to pay approximately AUD 69.8 million in specified circumstances, while reciprocal arrangements apply to the acquiring entity.

These provisions govern certain circumstances involving termination or failure to complete the transaction.

Key Risks and Operational Considerations

The proposed EQT acquisition introduces transaction execution risks because completion remains subject to regulatory, shareholder and court approvals.

Any delay in obtaining approvals could affect the expected timetable.

The independent expert's assessment and the outcome of the shareholder vote will also be important.

A competing acquisition proposal could influence the transaction process, although no alternative binding agreement has been announced.

Cleanaway's underlying business continues facing operational risks while the acquisition process progresses.

Waste management profitability depends on collection volumes, customer contracts, pricing and operating expenses.

Labour and fuel costs remain important expenditure categories.

The company's industrial services operations are exposed to changes in project activity, maintenance shutdown schedules and Demand from resources and industrial customers.

Environmental compliance also represents an ongoing obligation.

Landfill operations and waste treatment facilities require monitoring, remediation and expenditure to meet regulatory standards.

The company must also manage debt obligations and capital investment requirements.

Technology transformation and the integration of acquired businesses create additional implementation risks.

Cleanaway's financial performance during FY27 will depend on its ability to manage these factors while progressing the proposed acquisition.

What Lies Ahead for Cleanaway Waste Management in FY27?

Cleanaway enters FY27 with higher underlying earnings, improved free cash flow and a binding acquisition agreement with EQT Infrastructure.

The company's immediate corporate priorities include obtaining regulatory approvals, preparing the scheme booklet and progressing towards the shareholder meeting expected before the end of February 2027.

Implementation is targeted for the end of March 2027, subject to the required conditions.

Meanwhile, Cleanaway continues operating under its existing business strategy.

The company expects FY27 underlying EBIT of AUD 500 million to AUD 530 million, supported by continued growth in Solid Waste Services and improvement across selected Environmental and Technical Solutions operations.

Contract Resources is expected to remain an important earnings contributor as the company continues integrating the acquired business.

Operational efficiency, fleet management, technology investment and improved asset utilisation remain central to Blueprint 2030 2.0.

The FY27 half-year financial results, expected in February 2027, will provide additional information on earnings, free cash flow, debt and operating performance.

However, the company's longer-term ownership structure will depend on the outcome of the proposed EQT acquisition.

If the scheme is implemented, Cleanaway will transition to private ownership and continue its waste management and resource recovery operations outside the ASX-listed market.

Until then, the company remains focused on delivering its financial guidance, meeting regulatory obligations and progressing the transaction.

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