I Squared Capital and a consortium formed by TPG and Canada Pension Plan Investment Board are in the final race to place bids to acquire a controlling stake in KKR-backed Re Sustainability Ltd, four people familiar with the matter said.
The people said the transaction is expected to be valued at upwards of $1.6 billion, with binding bids due over the next 10-15 days.
Other investors including Bain and Advent, who were evaluating the asset have dropped out of discussions, two of the people cited above said. A third person confirmed the above details and added that is in discussions with various firms to jointly place a bid.
A potential deal could mark a final exit for KKR, which made several attempts including a public listing process to divest its eight-old investment in the company.
The global private equity firm acquired a 60% stake in the company, then called Ramky Enviro Engineers Ltd, for $530 million in 2018, with the Alla Ayodhya Rami Reddy family holding the rest.
While TPG, CPPIB, I Squared Capital, Advent and KKR declined to comment, Re Sustainability and Bain Capital did not immediately respond to Mint‘s requests for comment till the time of publication.
Exit strategy
In 2024, Mint reported that by selling the municipal business back to its founders and hiring bankers to find a buyer for the remaining industrial waste business.
In preparation for the exit, its municipality and industrial waste businesses were separated, with the founders taking full control of the former, and KKR owning the latter. The report also highlighted that Barclays and JP Morgan were brought in as advisors to help the global private equity firm sell the remaining stake at a $1 billion valuation.
Waste management leader
Founded in 1994 by Alla Ayodhya Rami Reddy, a member of Parliament from the YSR Congress Party, Re Sustainability provides services spanning municipal solid waste, industrial waste, biomedical waste and e-waste management, alongside recycling and waste-to-energy projects.
The company also offers integrated environmental services including water and wastewater treatment, desalination plants, laboratory services and waste containment.
According to a January report by India Ratings, Re Sustainability remains India’s largest private player in the industrial waste management (IWM) segment, which contributes nearly 80% of the company’s FY25 Ebitda.
The IWM business benefits from significant entry barriers arising from captive catchment dynamics, stringent regulatory approvals and specialised infrastructure requirements. It also generates recurring revenues from a diversified industrial customer base across sectors including fast-moving consumer goods, chemicals, and automobiles.
India Ratings said Re Sustainability reported consolidated revenue of ₹2,305 crore in FY25, up from ₹2,130 crore a year earlier, driven primarily by growth in its industrial waste management business.
The rating agency expects revenue to grow 10-15% in FY26, with stronger growth anticipated in FY27, supported by expansion in biomedical waste management, recycling operations and its Singapore business.