Ambipar makes its largest acquisition in North America
Ambipar Response – Ambipar’s emergency response business that merged with a SPAC – has just made its largest acquisition in North America, buying Canadian Ridgeline and increasing its revenue in the region by almost 50%.
Ridgeline operates 16 emergency response bases in Canada and is focused on the so-called L1 and L2 stages – basically, telephone support and emergency coordination (remotely or in person).
At L3, the company acts directly in the emergency, removing the chemical from the site and stabilizing the situation. For this, however, it needs to have the assets (such as trucks and vehicles).
Today, Ridgeline doesn’t have that asset structure, “so when it comes to emergency it subcontracts other companies,” CFO Thiago Silva told the Brazil Journal. “Now, we are going to take the assets we already have and use them to meet the emergencies that it generates.”
Ridgeline earned C$34 million last year (R$150 million at today’s exchange rate) with an EBITDA margin of 12.5%.
This margin is a little lower compared to other acquisitions that Ambipar made in the region precisely because Ridgeline does not operate in the L3.
With the synergies of the acquisition, the company expects that the margin “quickly” converges to 20% (the average of the other businesses).
Historically, Ambipar has paid a multiple of 5-6x EBITDA on its acquisitions. The company does not disclose the value of today’s transaction, but the CFO says the multiple was a little higher because Ridgeline “has another level of scale and sophistication”.
According to him, the company will act as the consolidator for all the other five businesses that Ambipar bought in Canada in recent years.
Ambipar said it will pay 60% of the subscription fee, 20% after one year and the rest after two years.
The acquisition comes a month after Ambipar merged its emergency response business with a SPAC, ensuring a funding of at least $168 million to continue expanding its operation.
According to the CFO, the focus of the expansion will be North America, where this market is still “extremely dispersed.”
“We have a pipeline pretty robust,” he said. “Now we can’t take our foot off the accelerator.”
Source: Brazil Journal