Livingbridge gets ESG-linked credit facility in Australia from Ares
Livingbridge has secured AUD 280m (USD 206m) in sustainability-linked credit facilities from Ares Management to support its acquisition of Australia-based waste management services provider Waste Services Group (WSG).
This is the first time a private credit investor has provided sustainability-linked financing for a transaction in Australia. It also represents a local debut for Ares’ Australia direct lending team as lead participant in a transaction, according to a statement.
Livingbridge acquired WSG for a reported AUD 500m from The Riverside Company and The Silverfern Group, a US-headquartered middle-market investment manager that represents a set of family offices. They owned the company for five years and completed a series of bolt-on acquisitions to broaden service offerings and geographical coverage.
WSG serves approximately 6,000 customers across two key business areas: waste collection services for commercial and industrial customers; and waste brokering and account management services for companies with multi-site and complex waste collection requirements.
The new credit facilities include a sustainability-linked margin ratchet, whereby the interest rate payable is directly correlated to WSG achieving certain pre-determined performance targets. These targets are aligned to the company’s long-term strategy to support the development of greener and more sustainable waste solutions in Australia.
This is the fifth Australian investment by UK-headquartered Livingbridge. Several of these have been acquisitions from other financial sponsors. In the past 18 months, the firm has bought Everlight Radiology from Intermediate Capital Group, Better Medical from Fortitude Investment Partners, and SmartClinics from Genesis Capital. It also exited TSA Management to Quadrant Private Equity.
Sustainability-linked credit facilities are gaining traction globally, at the transaction level and at the portfolio level. Notable activity in Asia in the latter category includes Baring Private Equity Asia (BPEA) securing a USD 3.2bn loan to support its private equity platform with interest rate reductions linked to performance against a series of sustainability metrics.
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