Cleanaway’s parent Brambles made a formal announcement to stock markets in Australia and London this morning (June 30) saying that “it had agreed to sell Cleanaway UK to Veolia ES Holdings plc, a subsidiary of Veolia Environnement S.A., a world leader in environmental services.”
The total cash consideration for the sale is £595 million (US$1,081 million). In addition, Veolia has assumed responsibility for the defined benefit pension funds of Cleanaway UK, which had a deficit of £56 million (US$101 million) as at 30 June 2005.
The chief executive officer of Brambles, David Turner, said: “The sustained improvement in Cleanaway UK’s performance this year has led to the attractive price and clean exit that have been agreed. Brambles’ divestment programme is now essentially complete and has generated total proceeds of US$3.52 billion, significantly more than our initial estimates.”
In addition to Cleanaway UK, the businesses that have been divested are Cleanaway Germany, Cleanaway Australia and New Zealand, Brambles Industrial Services Northern Hemisphere, Industrial Services Australia and the Regional Businesses. Brambles will now concentrate on its premium growth businesses of CHEP and Recall. The divestment proceeds will be used in accordance with Brambles announcement of 29 November 2005.
The sale is conditional upon approval from the relevant competition authorities in Europe, a spokesman for Brambles said.
For the year to 30 June 2005, Cleanaway UK had sales of £485 million (US$901 million) and comparable operating profit of £22 million (US$41 million) after management charges and the costs of the Cleanaway Global office. The value of the gross assets as at 31 December 2005 was £340 million (US$587 million).
Cleanaway UK is one of the largest collectors of municipal, commercial, industrial and trade waste in England and Wales and operates a specialist fleet of approximately 2,000 vehicles. Cleanaway UK’s waste disposal operations receive domestic, commercial and industrial dry waste and handle approximately 150,000 tonnes of liquid chemical waste per annum. Cleanaway UK employs more than 7,500 people and operates a nationwide network of service centres, a high temperature hazardous waste incinerator and four active landfill sites.
The acquisition of Cleanaway will mean that Veolia is now the largest waste management company in the UK and will see its coverage expand dramatically. It will have a much stronger presence in the north-west of England and also gains materials recycling facilities in East London and Essex including a modern MRF in Greenwich. Veolia will also own two hazardous waste incinerators – gaining one from Cleanaway.
Commenting on the announcement today, Veolia Environmental Services said its “double-digit” growth before the acquisition takes place could see the post-acquisition revenues reaching as much as £1.1 billion.
The company said the new entity will boast 13,000 employees, with expanded municipal business through the addition of new services and contracts. Veolia also said the acquisition would double the size of its commercial dry waste business with enhanced geographic coverage and route density and complement its current portfolio of recycling, treatment and disposal facilities.
Henri Proglio, Chairman and chief executive of Veolia Environnement, said: “The acquisition reinforces our position in the consolidating and fast-growing UK waste sector; it will allow us to accelerate our organic growth in the PFI and industrial sectors through an additional commercial network as well as a strengthened access to local authorities and major industrial companies.
“With significant revenue and cost synergies in all business lines, the acquisition provides value creative growth,” Mr Proglio added.