What does EQT's recommended cash offer mean for Cleanaway Waste Management (ASX:CWY)?

Sonal Goyal

10 November 2026 05:03 PM AEDT

What does EQT's recommended cash offer mean for Cleanaway Waste Management (ASX:CWY)?

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Key Highlights

• On 13 August 2026, Cleanaway disclosed a conditional, non-binding proposal from EQT Infrastructure at A$3.13 cash per share, reduced by the FY26 final dividend.

• The company said the proposal implied an Enterprise value of about A$9.4 billion and a 32.1% premium to the A$2.37 close on 12 August 2026.

• Around 19 October 2026, the parties entered a Scheme Implementation Deed.

• reports of the announcement put the price at A$3.095 cash per share, an enterprise value of roughly A$9.3 billion and about 20 times FY26 underlying EBIT.

What does a recommended A$3.095-a-share cash offer from EQT Infrastructure mean for Cleanaway Waste Management (ASX:CWY) and its shareholders? In short, the company has moved from an indicative approach in August to a binding Scheme Implementation Deed in October 2026, and the board unanimously recommends the deal, subject to conditions. Shareholders will vote on it in 2027, so the outcome is not yet settled.

The central development: a recommended scheme with conditions

On 13 August 2026, Cleanaway disclosed a conditional, non-binding proposal from EQT Infrastructure at A$3.13 cash per share, reduced by the FY26 final dividend. The company said the proposal implied an enterprise value of about A$9.4 billion and a 32.1% premium to the A$2.37 close on 12 August 2026. It granted EQT up to nine weeks of exclusive due diligence.

Around 19 October 2026, the parties entered a Scheme Implementation Deed. reports of the announcement put the price at A$3.095 cash per share, an enterprise value of roughly A$9.3 billion and about 20 times FY26 underlying EBIT. The price falls by any dividends paid before implementation.

The board's recommendation is conditional on no superior proposal emerging and on an independent expert concluding that the scheme is in shareholders' best interests. Other conditions reported include approvals from Australia's Foreign Investment Review Board and the ACCC, authorities in Kuwait and Saudi Arabia, court and Shareholder approval, and no material adverse change.

also describe a possible special dividend, potentially fully franked, of between 14.5 and 19 cents per share.

What Cleanaway does

Cleanaway is one of Australia's largest integrated waste management companies. It collects, sorts, recycles and disposes of waste, and operates landfills, transfer stations and recycling facilities. Its customers include households (through councils), businesses, industry and government.

It reports in three segments. Encouraging Waste Services covers collection and landfill, and is the largest earner. Oils and Technical Services and Health Services handles liquid and hazardous waste, and healthcare waste. Contract Resources and Industrial Services provides industrial cleaning and maintenance, expanded through the Contract Resources acquisition.

Revenue drivers include collection volumes, landfill gate fees, pricing that is often linked to inflation, industrial activity and, in recycling, Commodity prices.

FY26 results: Earnings up, statutory profit down

For the 12 months to 30 June 2026, reported on 20 August 2026, Cleanaway posted:

• Gross Revenue of A$4,371.3 million, up 13.5%.

• Underlying EBITDA of A$892.6 million, up 12.8%.

• Underlying EBIT of A$470.2 million (FY25: A$411.8 million), up 14.2%, at a 12.6% margin.

• Underlying net profit after tax of A$223.1 million, up 13.6%.

• Statutory net profit after tax of A$98.5 million, down 37.2%, after A$124.6 million of significant and non-recurring items.

• Free Cash Flow of A$213.8 million, up 63.7%.

The total FY26 Dividend was 6.85 cents per share (FY25: 6.0 cents), including a fully franked final of 3.5 cents, paid on 8 October 2026.

The gap between underlying and statutory profit matters.

Operating performance by segment

Encouraging Waste Services lifted net revenue 6.4% to A$2,506.4 million and EBIT 9.1% to A$405.0 million, with a 16.2% margin. That division is the core of the earnings base.

Contract Resources and Industrial Services grew net revenue 76.9% to A$669.7 million, largely reflecting the acquisition's first 11 months in the group. EBIT rose to A$55.9 million.

The weaker area was Oils and Technical Services and Health Services, where EBIT fell 10.7% to A$75.1 million. Cleanaway cited lower oils and technical services volumes in the second half, and weakness in health and industrial services.

Balance sheet and guidance

Net Debt rose to A$2,288.7 million from A$1,736.6 million, taking the Leverage Ratio to 2.27 times (FY25: 1.85 times). Interest Cover fell to 7.49 times from 10.12 times. Higher debt followed the Acquisition activity, and it is relevant to the buyer's financing as well as to the company's own flexibility.

For FY27, management guided to underlying EBIT of A$500 million to A$530 million. Other guided items include cash Capital Expenditure of about A$360 million, cash interest of about A$140 million, landfill remediation of about A$180 million across FY27 to FY29, and A$40 million to A$50 million of cash costs for an IT transformation. Guidance is a company expectation, not a certainty.

Sector conditions and competitive position

Waste is generally seen as a defensive, essential service, with recurring contracts and pricing mechanisms. Landfill and processing infrastructure is difficult to permit and replicate, which supports incumbents. Cleanaway competes with other national and regional operators, such as Veolia, and smaller local players. That list is general market knowledge rather than drawn from the sources below.

Pressures include landfill levies, tighter environmental regulation, fuel and labour costs, and the need for investment in recycling and resource recovery capacity. Industrial and oil-related volumes can also be cyclical.

Risks, uncertainties and what to watch

The key uncertainty is whether the scheme completes. Regulatory reviews, including the ACCC and FIRB, can take time or lead to conditions. The deal also needs court and shareholder approval, and the board's recommendation depends on the independent expert's takeaway.

If the scheme fails, Cleanaway would remain a listed company carrying higher leverage than a year earlier, a weaker oils and health result, and an FY27 plan that includes IT and remediation spending.

Upcoming milestones reported include the scheme booklet, the independent expert's report, and a scheme meeting expected before the end of February 2027. Implementation is targeted for late March 2027 if all approvals are granted.

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