It is expected that Greenstar will be integrated with Biffa and cement Biffa’s position as one of the largest collection, recycling and energy-from-waste providers in the UK.
Biffa has the largest industrial and commercial collections network in the UK serving over 70,000 customers through 1,450 collection vehicles and across 128 locations.
It operates 65 million square metres of landfill void across 24 sites throughout the UK and a renewable energy business with 103 MW of installed capacity.
And, Biffa currently handles seven million tonnes of waste each year, processes approximately half a million tonnes of recyclables through nine recycling facilities and operates two PFI contracts.
Greenstar is based in Aylesbury, Buckinghamshire, and provides recycling waste management services to a large number of blue chip clients in the commercial and industrial sectors.
Greenstar’s truck fleet of 569 vehicles provides collection services to 23 local authorities and over 900,000 homes and it operates some of the largest materials recycling facilities in the UK. The business employs over 2,000 people and reported sales of £145 million in 2009.
Platform
Mark Keough, interim chief executive of Biffa, commented: “This acquisition significantly accelerates Biffa’s strategic plans to transition to a recycling and energy-from-waste focused integrated waste management company.
“Greenstar’s substantial recycling platform and commercial approach combined with Biffa’s operational capability and national reach will enable Biffa to provide complete waste management solutions to its growing customer base.”
Ian Wakelin, chief executive of Greenstar UK, commented: “Since its inception in 2001, Greenstar has grown to be one of the UK’s leading recycling-led waste management companies and NTR has been a strong, supportive partner in this drive.
“Going forward and building on the strengths of both organisations, the combined company will be a market-leading, dynamic and customer-focused organisation. I look forward to working with the Biffa team to bring this about.”
Deal
Successful completion of the deal will release significant liquid resources for NTR Group, enabling it to both fortify cash reserves and invest in other areas of its clean energy and resource sustaining portfolio. The net proceeds to NTR Group after repayment of debt and disposal costs will amount to around £80 million.
The transaction, which is subject to regulatory and various other approvals, arises from a review by NTR of its business portfolio as reported by letsrecycle.com in March (see letsrecycle.com story) .
With a range of growth opportunities to exploit, the Group concluded that its UK waste management business would provide greater value to NTR shareholders through a sale at this point.
NTR plc stressed that its decision to sell the company would not affect NTR’s Irish and US based Greenstar businesses, which it claimed would continue to play a “critical role” in the Group’s strategy to build and run clean energy and resource sustaining businesses.
Jim Barry, chief executive of NTR plc, said: “The Greenstar UK team, with the support of NTR plc, have built a premier sustainable waste management business that has attracted the strategic interest of one of the leading players in the country.
“Greenstar UK is on the cusp of significant further growth opportunities and with competing demands for resources from the other parts of our portfolio, this transaction both releases substantial cash reserves for NTR and opens up new sources of funding for Greenstar UK,” he added.
Growth
NTR said the transaction represented just one dimension of its efforst to preserve its balance sheet strength at Group level whilst exploiting opportunities for growth.
Other recent examples include the announcement of successful project debt financing of $240m (£165m) by its wind business, Wind Capital Group, the completion of an $80m (£55m) primary equity raising by its ethanol sector investment, Green Plains Renewable Energy Inc., and the securing of a €120m (£99m) debt facility by its Irish based Greenstar business.
Mr Barry said: “The quality of our portfolio continues to attract significant interest from leading debt providers and potential equity partners, even in this most difficult funding environment, providing us with a wide range of options to pursue.”
Montagu Private Equity and Global Infrastructure Partners successfully completed the £1.7bn take private of waste management firm Biffa Plc in April 2008, in partnership with HBOS Fund Investments through. The consortium is known as WasteAcquisitionco Limited (see letsrecycle.com story).
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