NEW YORK and SAO PAULO, Aug. 16,
2017 /PRNewswire/ -- Boulevard Acquisition Corp. II
(NASDAQ: BLVD) ("Boulevard"), a blank check company sponsored by an
affiliate of Avenue Capital Group, and Estre Ambiental S.A.
("Estre"), the largest waste management company in Brazil and Latin America, jointly
announced today that they have entered into a definitive agreement
pursuant to which Boulevard will combine with Estre. As a result of
the transaction, Estre will become a publicly listed company with
an anticipated initial enterprise value of approximately
US$1.1 billion, implying a 7.7x
multiple of its projected 2018 Adjusted EBITDA.
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, which is expected to generate revenues of approximately
US$466 million and adjusted EBITDA of
approximately US$132 million in 2017
(considering a USD/BRL exchange rate of US$1.00 to R$3.19), 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 in an expanding
market, Estre is favorably positioned to lead in a fragmented
industry with increasing regulatory support for
environmentally-sound waste disposal.
Today, Estre operates as an environmentally progressive,
transparent and compliance-focused company. Estre's landfill
operations, which are currently focused around 13 strategically
located landfills, dispose of approximately 6 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, with
the potential to generate more than 80 MW, as well as three
hazardous and medical waste facilities.
Estre's management team, led by chief executive officer Sérgio
Pedreiro, will continue to lead the company following the
completion of the transaction. It is anticipated that the board of
directors of the company will be comprised of nine members,
including five independent directors with strong environmental
services and compliance backgrounds.
Stephen Trevor, Chief Executive
Officer of Boulevard, said, "We are excited to join with Estre's
strong and disciplined leadership team to grow Brazil's waste management industry leader both
organically and by pursuing tuck-in opportunities. The Estre team
is known as high-performing operators, and they also have
distinguished themselves in Latin
America for their environmentally progressive practices and
the implementation of a strong compliance program since the current
leadership took over."
Sérgio Pedreiro, Chief Executive Officer of Estre, said, "Estre
will continue to work hard to distinguish itself as one of the
leading waste management enterprises in Latin America. With Brazilian waste tonnage
growing consistently at 4% per year over the last few years and a
favorable regulatory framework, this transaction provides Estre the
resources necessary to continue to capture growth and to invest in
acquisition opportunities. We look forward to partnering with
Boulevard to accelerate the execution of our growth strategy."
Marc Lasry, Chairman of
Boulevard, said, "We are making this investment at an attractive
valuation at what we believe is an inflection point in Brazil's macroeconomic backdrop, and as the
country's solid waste industry continues to consolidate and
institutionalize."
Key Transaction Terms
Under the terms of the transaction, a new Cayman holding company
("Holdco") will be formed and, prior to the consummation of the
business combination, all or substantially all of the shareholders
of Estre will exchange their shares of Estre for shares of Holdco
at a fixed value of US$10.00 per
share and as a result Estre will become a subsidiary of
Holdco. At the closing, Boulevard will also become a
subsidiary of Holdco, which will be the publicly traded entity with
its shares listed on NASDAQ, and the outstanding Boulevard shares
will be converted in the business combination into shares of Holdco
at a fixed exchange rate of one-to-one. All outstanding warrants to
purchase Boulevard shares will, by their terms, become warrants to
purchase shares of Holdco with an exercise price of US$11.50 per warrant.
It is expected that the combined company will have an initial
enterprise value of approximately US$1.1
billion, implying a 7.7x multiple of projected 2018 Adjusted
EBITDA.
Estre shareholders are not receiving any cash consideration in
the transaction and will receive shares of the new publicly traded
holding company. After giving effect to the transaction and
assuming no redemptions by the existing Boulevard stockholders,
existing Estre shareholders will hold approximately 43% of the
shares of the public company, while existing Boulevard stockholders
will hold the remaining shares. It is anticipated that the cash
held in trust by Boulevard (currently US$370
million) will be used to retire US$200 million of existing debt of Estre, at a
discount to its outstanding principal amount, and to fund the
company's growth plans and its working capital requirements, as
well as transaction expenses.
The transaction, which has been approved by the Boards of
Directors of Boulevard and Estre, is expected to close in the
fourth quarter of 2017. Closing is subject to approval by
Boulevard's shareholders and the satisfaction of other customary
closing conditions.
Greenberg Traurig LLP and Demarest Advogados acted as counsel to
Boulevard. Skadden, Arps, Slate, Meagher & Flom LLP and
Machado, Meyer, Sendacz e Opice Advogados acted as counsel to
Estre.
A full description of the transaction terms will be provided in
a registration statement on Form F-4 to be filed with the United
States Securities and Exchange Commission ("SEC") that will include
a proxy statement for the stockholders of Boulevard that also
constitutes a prospectus of Holdco. Boulevard urges
investors, stockholders and other interested persons to
read, when available, the proxy statement/prospectus,
as well as other documents filed with the SEC, because
these documents will contain important information.
After the registration statement is declared effective, the
definitive proxy statement/prospectus to be included in the
registration statement will be mailed to stockholders of Boulevard
as of a record date to be established for voting on the proposed
business combination. Stockholders will also be able to obtain a
copy of the proxy statement/prospectus, without charge, by
directing a request to: Boulevard Acquisition Corp. II, 399 Park
Avenue, 6th Floor, New York, NY
10022. The preliminary and definitive proxy statement/prospectus to
be included in the registration statement, once available, can also
be obtained, without charge, at the SEC's internet site
(http://www.sec.gov).
About Estre Ambiental S.A.
Estre is the largest waste management company in Brazil and Latin
America. The company 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. Estre's landfill operations, which are currently
focused around 13 strategically located landfills, dispose of
approximately 6 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, with the potential to generate
more than 80 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.
Participants in the Solicitation
Boulevard, Estre and Holdco (when formed) and their respective
directors and certain of their respective executive officers may be
considered participants in the solicitation of proxies with respect
to the proposed business combination described in this press
release under the rules of the SEC. Information about the directors
and executive officers of Boulevard is set forth in its Annual
Report on Form 10-K for the year ended December 31, 2016, which was filed with the SEC
on February 21, 2017.
Information regarding the persons who may, under the rules of
the SEC, be deemed participants in the solicitation of the
stockholders in connection with the proposed business combination
will be set forth in the proxy statement/prospectus when it is
filed with the SEC on Form F-4. These documents can be obtained
free of charge from the sources indicated above.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed transaction and shall not constitute an
offer to sell or a solicitation of an offer to buy the securities
of Boulevard, Holdco or Estre, nor shall there be any sale of any
such securities in any state or jurisdiction in which such offer,
solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Investor Conference Call Scheduled
Boulevard will host an investor conference call to discuss the
transaction on Wednesday, August 16,
2017 at 9:00 a.m. EDT.
Investors may listen to the conference call by dialing (877)
407-0784 toll free in the U.S. or (201) 689-8560 internationally or
by accessing the webcast at the following link
http://public.viavid.com/index.php?id=125822. To access the replay,
the toll-free access number is (844) 512-2921 and participants
should provide the conference replay pin number of 13668243 or by
accessing the webcast link above.
Forward-Looking Statements
This press release includes certain statements that are not
historical facts but are forward-looking statements for purposes of
the safe harbor provisions under the United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as "believe,"
"may," "will," "estimate," "continue," "anticipate," "intend,"
"expect," "should," "would," "plan," "predict," "potential,"
"seem," "seek," "future," "outlook," and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding 2018 adjusted
EBITDA projections and forecasts of other financial and performance
metrics, projections of market opportunity, macroeconomic outlook
and the expected benefits of the proposed transaction. These
statements are based on various assumptions and on the current
expectations of Boulevard and Estre management and are not
predictions of actual performance. These forward-looking statements
are subject to a number of risks and uncertainties, including
general economic, political and business conditions in Brazil; potential government interventions
resulting in changes to the Brazilian economy, applicable taxes and
tariffs, inflation, exchange rates, interest rates and the
regulatory environment; changes in the financial condition of
Estre's clients affecting their ability to pay for its services;
the results of competitive bidding processes, which could lead to
the loss of material contracts or curtail Estre's expansion
efforts; Estre's history of losses; the outcome of judicial and
administrative proceedings to which Estre is or may become a party
or governmental investigations to which Estre may become subject
that could interrupt or limit Estre's operations, result in adverse
judgments, settlements or fines and create negative publicity;
changes in Estre's clients' preferences, prospects and the
competitive conditions prevailing in the Brazilian waste
management; the inability of the parties to successfully or timely
consummate the proposed business combination, including the risk
that any required regulatory approvals are not obtained, are
delayed or are subject to unanticipated conditions that could
adversely affect Holdco or the expected benefits of the proposed
business combination or that the approval of the stockholders of
Boulevard and/or the shareholders of Estre for the transaction is
not obtained; failure to realize the anticipated benefits of the
proposed business combination, including as a result of a delay in
consummating the proposed business combination or a delay or
difficulty in integrating the businesses of Boulevard and Estre;
the amount of redemption requests made by Boulevard's stockholders;
the ability of Boulevard or Holdco to issue equity or equity-linked
securities in connection with the proposed business combination or
in the future, including, without limitation, pursuant to a private
investment in public equity, or PIPE, or other offering of equity
securities, which could dilute the interests of Boulevard's
stockholders; those factors discussed in Boulevard's Annual Report
on Form 10-K for the year ended December 31,
2016 under the heading "Risk Factors," and other documents
of Boulevard filed, or to be filed, with the SEC. These
statements speak only as of the date they are made and neither
Boulevard nor Estre undertakes any obligation to update any
forward-looking statements contained herein to reflect events or
circumstances which arise after the date of this press release.
Non-IFRS Financial Information
This press release includes the presentation of Adjusted EBITDA,
which is a supplemental measure of performance that is neither
required by, nor presented in accordance with, generally accepted
accounting principles or international financial reporting
standards ("IFRS"). Non-IFRS financial measures do not have a
standardized meaning, and the definition of adjusted EBITDA used by
Estre may be different from other, similarly named non-IFRS
measures used by Estre's peers operating in the waste management
industry.
Contacts
For Boulevard:
Todd Fogarty / Aduke Thelwell
Kekst
todd.fogarty@kekst.com or aduke.thelwell@kekst.com
212-521-4800
For Estre:
Juliana Gilio
Giusti Comunication
Juliana.gilio@giusticom.com.br
+55 11 5502-5460
Citigroup Global Markets Inc.:
Neil Shah
+1 (212) 723-3264
neil.shah@citi.com
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SOURCE Boulevard Acquisition Corp. II