Estre to buy three Brazilian waste management companies

Estre Ambiental S.A., a waste management company in Brazil and Latin America, has agreed to acquire three waste management companies in Brazil. No financial terms were disclosed. The deal is expected to close in early 2018. As previously reported by PE HUB, Estre is merging with Boulevard Acquisition Corp II, a blank check company backed by Avenue Capital Group.

PRESS RELEASE

São Paulo and New York, October 23, 2017 – Estre Ambiental S.A. (“Estre”), the largest waste management company in Brazil and Latin America, today announced that it has entered into three independent memoranda of understanding to acquire three waste management companies in Brazil. All three transactions are expected to be completed in early 2018. As announced on August 16, 2017, Estre has entered into a definitive agreement to combine with Boulevard Acquisition Corp. II (NASDAQ: BLVD) (“Boulevard”) in a transaction that will result in a new-publicly listed combined company Estre Ambiental, Inc. (“ESI”).
In aggregate, the three companies expected to be acquired operate 229 collection vehicles and one landfill asset, servicing 97 clients. With expected combined annual revenues of R$213 million and Adjusted EBITDA of R$43 million in 2017, the three companies collectively are expected to contribute an incremental R$30 million (US$9.5 million, assuming a USD/BRL exchange rate of US$1.00 to R$3.19) to ESI’s projected 2018 Adjusted EBITDA. Estre believes that the average purchase multiple of approximately 3.5x Adjusted EBITDA (pre-synergies) further validates the contemplated acquisitions and Estre’s inorganic growth thesis.

Estre believes that the acquisitions will position the company to expand in three distinct, strategically-important geographic areas. The three transactions are independent of each other, are with unrelated sellers and are not conditioned on each other in any way.

Estre chief executive officer Sérgio Pedreiro commented, “As the leading waste management company in Brazil and Latin America, our goal is to continue capturing growth and investing in attractive acquisition opportunities. We are pleased to have reached agreements with three strong local players that will contribute new customer contracts, additional operating assets and increased landfill capacity. Beyond these proposed transactions, we have a robust pipeline of additional acquisitions which we also intend to aggressively pursue.”

Estre provides a full range of waste-related and environmental services to a public of more than 31 million people daily in seven Brazilian states where approximately 50% of Brazil’s population is concentrated. The company focuses on collection, treatment and disposal of non-hazardous and hazardous waste to municipal, industrial and commercial customers. Showing consistently high-single-digit revenue growth (excluding divested operations) in an expanding market, Estre is favorably positioned to lead in a fragmented industry with increasing regulatory requirements for environmentally-sound waste disposal.

About Estre Ambiental S.A.
Estre is the largest waste management company in Brazil and Latin America, as measured by disposal capacity, collection volume and market share. The company provides collection, transfer, recycling and disposal services to more than 31 million people in seven Brazilian states where approximately 50% of Brazil’s population is concentrated. Estre’s landfill operations, which are currently focused around 13 strategically located landfills, dispose of approximately 6.0 million tons of waste annually. The company also expects to add five additional landfills to its operations over the next several years. Estre’s waste management infrastructure also includes two landfill gas-to-energy facilities with an installed capacity of approximately 14 MW, as well as three hazardous and medical waste facilities. Additional information on Estre is available at http://www.estre.com.br/en/.

About Boulevard Acquisition Corp. II
Boulevard is a public investment vehicle formed by Avenue Capital Group for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Boulevard completed its initial public offering in September 2015, raising US$370 million in cash proceeds.
Boulevard’s officers and certain of its directors are affiliated with Avenue Capital Group. Avenue is an established global alternative investment firm founded in 1995. Avenue’s primary focus is investing in credit and other special situation investments in the United States, Europe and Asia. Avenue has approximately US$10 billion in assets under management as of July 31, 2017. Additional information about Boulevard is available at www.boulevardacq.com.