Shanks has steadily acquired a number of businesses, particularly in Holland, in recent years and has reported recent growth there. In the UK it remains focused primarily on PFI contracts. Should it acquire the Dutch company, Shanks would become a significant recycler, particularly in the glass and waste electronics sector.
Reverse
In what would be a reverse takeover Shanks said today (24 May), that it was looking to buy Van Gansewinkel, describing it as a “leading privately-owned waste collection and recycling business in the Netherlands and Belgium”.
The UK company knows Van Gansewinkel well. Shanks has previously sent, for example, municipal waste material under its East London Waste Authority contract for incineration and energy recovery by AVR, a business which was owned by Van Gansewinkel until 2013.
And, former Shanks chief Mike Averill is also on the supervisory board of the Dutch business as is Malcolm Ward, former chief executive of the UK’s Cory Environmental.
Institutions
Van Gansewinkel, which is owned by a number of financial institutions, describes itself as a “leading waste management service provider, recycler and supplier of high quality secondary raw materials”. It collects, treats and processes waste, from which raw materials are generated. And, Van Gansewinkel says it is the leader in the Benelux area, its home market, and also operates in Germany, France, Portugal and Hungary.
The Dutch company’s activities are also said to be particularly strong in the commercial and industrial arena. Ironically, in 2009, Van Gansewinkel was widely reported in the UK as being interested in acquiring Shanks.
Due diligence
Shanks said today in a statement that it is “contemplating the possible acquisition of the Van Gansewinkel Groep BV …. After a period of preliminary due diligence, Shanks will shortly be submitting an updated, indicative non-binding proposal to the Supervisory Board of Van Gansewinkel for consideration. Accordingly, there can be no certainty that any transaction will occur nor as to the terms of any transaction.”
Shanks confirmed that the financial regulator in London considers that the move is a reverse takeover and so the company has asked for a suspension of its shares.
The company also noted that part of its strategy is to “actively manage the Group’s portfolio to improve returns and accelerate growth through the disposal of non-core assets and/or the acquisition of value-enhancing businesses, particularly where strong synergies exist with existing Shanks businesses. Given the structure and conditions in the Benelux Solid Waste market, the Board believes that the acquisition of Van Gansewinkel has the potential to transform and enhance the Company’s position in this market. The combination of the two businesses would create a leading player, with complementary strengths across all market sectors.”
In recent years Van Gansewinkel has faced financial restructuring after some difficult years and after an agreement with lenders its debts are thought to have reduced to about €320 million.
Peter Dilnot, Shanks Group chief executive, promised not to pay over the odds for the Dutch company. He said: “The Board will remain disciplined on value and will only pursue the acquisition of Van Gansewinkel if it delivers attractive returns for shareholders. If a transaction were to proceed, Shanks would intend to finance the acquisition through a combination of new debt facilities, equity consideration to the vendors and an equity fund raising.”
If Shanks were to acquire the continental business, it would dramatically increase its range of services.
Recycling
Van Gansewinkel has recycling activities within its Benelux operations that include dealing with paper, cardboard, wood, plastics, metals and food waste. Recently, Van Gansewinkel said it was “constantly searching for new processing methods and improving its recycling lines. In 2015, we invested heavily in state-of-the art sorting lines in the Netherlands (Amsterdam) and Belgium (Puurs, Châtelet).”
Van Gansewinkel’s recycling business includes Coolrec, Maltha and Van Gansewinkel Minerals. Coolrec notes that it “is the market leader in the Benelux for WEEE recycling and occupies a top 3 position in Europe” while Maltha describes itself as the largest recycler of packaging and sheet glass in Europe.” The company recycles more than 1 million tonnes of glass each year.
‘Positive’
A spokesman for Van Gansewinkel told letsrecycle.com: “We have recently published our annual results for 2015 which record details of our successful refinancing operations.”
“The results for the first quarter of 2016 show improving results compared to last year.”
With regard to the interest from Shanks, the spokesman added: “There is interest in the market. The company looks at strategic options and this could be an option.”
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