The expansion by Manchester-based Mercury Recycling also sees the purchase of Envirolite Midlands Limited and Bakersfield Environmental Services Limited for £1.1 million in cash.
Mercury will pay £850,000 in cash on completion with the balance of £250,000 being payable in cash three months after the date of completion, subject to any adjustments.
The Envirolite Group provides lamp recycling services to consumer and industrial users, and currently operates from three locations in the south of England, the Midlands and Scotland. Mercury Recycling opened the UK's first lamp recycling site at Trafford Park in 1996 and is now one of the major companies in the sector and also provides a collection service for waste electrical and electronic equipment.
Complementary
Bryan Neill, managing director of Mercury Recycling, said: “The acquisition is very complementary with our existing business, to which it brings new areas of geographic coverage. In addition, there will be opportunities to achieve further cost savings and economies of scale.”
Alongside details of the acquisition, Mercury Recycling today published its annual results which showed group sales up 10% to £2,657,000 for 2007 (2006: £2,399,000). Operating profit (before exceptional items) was up 43% to £479,000 (2006: £336,000)
Confident
Company chairman Lord Barnett said: “I am confident of the Group's future prospects, since we estimate that still only some 30% of the approximately 130 million lamps a year are being recycled.
The future potential in the sector was emphasised by Mr Neill.
He told letsrecycle.com that the lamp sector would see considerable growth in future years although it remained competitive. “New legislation will make it a legal requirement to use energy efficient lamps from 2009 and this will add about 250 million lamps to be recycled every year.”
This estimate, he explained, comes with the likelihood of 600-800 million lamps going into the market in 2009 as old style lamps are discarded. When the energy efficient lamps are discarded they will need to be recovered as they are hazardous.
And, he added that the Envirolite lamp recycling plant in Perth will remain open “for the foreseeable future”.
Subscribe for free