EQT’s AUD 9.3bn (USD 6.5bn) take-private offer for ASX-listed Cleanaway Waste Management is most notable as a vote of confidence in the target market. Australian waste management appears primed for growth – but the biggest value creation opportunities will be in private ownership.

“We like the waste sector globally but really like the Australian waste space,” said Sam Franklin, a managing director at EQT Infrastructure.

“The sector has a lot of attributes that lend itself quite neatly to our investment philosophy. It’s got a strong asset base, provides an essential service to society, which is an important overlay for us, and it’s an area that’s going to require significant investment over the longer term as the needs for waste processing grow and evolve.”

Industry research offers some support to this outlook. Mordor Intelligence projects that the global waste management market will see growth of 6.58% per year through 2031, when it will be worth USD 1.52tn. The Australia market, meanwhile, will grow at 11.4% a year, hitting USD 85bn in 2030, according to Next Move Strategy Consulting.

EQT agreed to acquire 100% of Cleanaway for AUD 3.095 per share in cash, a 32.1% premium to the stock’s closing price on 12 August, the last trading day before the initial announcement was made. The transaction, subject to shareholder and regulatory approval, is expected to close by the end of March 2027.

Timing aligns

Cleanaway claims to be Australia’s largest integrated network of waste infrastructure assets with 350-plus active sites, a fleet of more than 6,200 vehicles, 135 licensed facilities and over 9,700 employees. Network assets include collection, recycling, treatment, resource recovery, and disposal facilities.

Recent growth, although healthy, has reportedly fallen short of market expectations. Revenue for FY26 is up 13.5% year-on-year at AUD 4.37bn. EBITDA rose 12.8% during the same period to AUD 892.6m, while EBITDA margin grew 10bp to 12.6%.

EQT has been tracking the company since 2020. The timing of its offer hinged on both thematic and business-level factors.

In recent years, the investor has become increasingly focused on environmental services and waste management. In the more recent term, Cleanaway’s growth trajectory and operational challenges came into focus as a good fit for private capital.

The next stage of growth was mapped out last April, when Cleanaway announced its Blueprint 2030 2.0 strategy. This puts an emphasis on customer value, network optimisation, leveraging technology to boost efficiency, and making existing investments work harder.

Franklin said Cleanaway has always been well-regarded with a good return on capital and consistent dividend payments over the past 10-15 years. Yet it hasn’t been immune to market stresses.

Rising fuel prices have negatively impacted public market investor confidence, especially in terms of increased short-term capital needs potentially reducing capacity to pay dividends. This has been compounded by broader concerns around costs related to a higher interest rate environment.

“EQT has some real proprietary platforms that can help accelerate value creation, and it sparked the initial discussions with the company,” Franklin said. “It resonated with both the challenges the business was facing but also the opportunities and ability for us to be a valuable partner.”

Global playbook

EQT invested via its sixth infrastructure fund, which closed at the hard cap of EUR 21.5bn (USD 24.2bn) in March 2025. After Cleanaway, the vehicle will be 85%-90% deployed.

Waste is a firmly established theme for EQT globally. Other Fund VI investments include Spanish environmental solutions provider Urbaser and US industrial waste manager Arcwood Environmental, while waste-to-energy businesses ReWorld and Encyclis, based in the US and UK, respectively, sit in Fund V. The firm backed AMCS, a waste management software provider, via its 10th flagship private equity fund.

It is hoped that learnings from these experiences can be put to work in Australia, where the waste market is considered reasonably developed but still lacking the sophistication seen in the US and Europe. The country generated 79m tonnes of waste in 2024-2025, up 4.1% year-on-year, according to government data. However, a large portion of solid waste is still disposed of in landfills.

“There’s been limited investment in Australia around a more sustainable way to process and dispose of waste, but there are new technologies emerging,” said Franklin. “We have significant experience with our US and European platforms and believe we can use that as we see sustainability and impact as a real opportunity.”

A board with local and global experience in the sector will be assembled with a brief to work with management on organic growth to grow the business organically. Efforts will also be made to service more customers, boost efficiency, and lean into the next phase of final waste disposal. EQT will reinvest in the company in pursuit of these goals.

An AUD 5.6bn financing package has reportedly been secured to support the acquisition. Franklin noted that the capital structure includes both drawn and undrawn debt facilities, with the latter providing capacity to support Cleanaway’s future growth and investment needs.

“We believe Australia has a strong, diversified macroeconomic story, a stable geopolitical overlay, and it’s a market we see significant opportunity for further investment,” he added. “This underpinned our ability to get conviction in deploying capital into Australia and the waste sector.”