Viridor buys Norfolk recycling company for £16m

Viridor’s parent company, Pennon Group, said that the purchase of the Thetford-based firm for a cash sum of £14.9 million, with debt of £1.1 million, was in line with its strategy of increasing its waste management activities, and in particular those in the recycling sector.

Pearsons’ operations involve it dealing with commercial, industrial, construction and local authority waste across its Howlett Road and East Wretham locations. The latter site is home to both the company’s headquarters and the MRF it opened in 2008 (see letsrecycle.com story).

The company was founded in 1945 as a waste paper business but now handles a range of materials at its two sites, as well as running a fleet of over 35 collection vehicles and servicing more than 4,500 skips, as well as other containers, plastic banks and wheeled bins throughout the Eastern Region, giving it a combined turnover exceeding £8 million.

Its total input volumes are around 50,000 tonnes-a-year, and Pennon Group noted that Pearson’s had recently upgraded its facilities to give them a combined licensed capacity of 139,000 tonnes.

Commenting on the acquisition from Pearson’s owners, Mr P Pearson and Mr J Pearson, Viridor’s chief executive, Colin Drummond, highlighted the “fast-growing” part recycling was paying within his company’s operations – accounting for 16% of its profits in 2009/10.

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And, he linked the purchase to the June 2010 acquisition of Northampton-based Reconomy Recycling Solutions, which also added to its waste paper volumes and sorting capacity, for £23.8 million (see letsrecycle.com story).

Mr Drummond said: “This acquisition has an excellent geographic and business fit with Viridor’s existing operations in the East of England (including the ‘Reconomy’ business acquired in June 2010).”

“The acquisition will permit significant cost saving and volume increase and is expected to be earnings enhancing before amortisation of intangibles in its first full year,” he added.

Viridor has said previously that it intends to focus its business on distinct areas of the country, rather than becoming a “national business”, and the importance of the East and South East of England within that was further shown by the June 2009 purchase of office waste recycling company London Recycling (see letsrecycle.com story).