The Irish owner of UK waste businesses including William Tracey Group and Wastecycle – DCC plc – has sold its environmental division to a private equity firm in a transaction worth up to £215 million.
DCC plc, which first entered the UK waste market with the acquisition of Nottingham-based Wastecycle in 2006, announced the sale yesterday (April 5).
The buyer has been named as Exponent, a private equity firm whose portfolio includes the Ambassador Theatre Group, equipment-hire business HSS Hire and Quorn Foods. The company currently has no other investments in the waste and recycling market.
DCC Environmental had been the majority shareholder in the William Tracey Group which is among the largest waste management businesses in Scotland, with a turnover of around £50 million per year. Michael Tracey, the company’s managing director, also holds a minority shareholding in DCC Environmental.
William Tracey Group currently employs around 450 people across 8 sites in Scotland and 2 sites in the North of England.
Wastecycle, which operates waste management services across the East Midlands, handling close to 500,000 tonnes of materials per year.
“The business has performed strongly in recent years and we expect it to continue to grow and develop under the ownership of Exponent.”Tommy Breen
Alongside Wastecycle and William Tracey, DCC’s environmental division also comprises Oakwood Fuels, a Nottinghamshire provider of hazardous waste services to the automotive industry and the Irish hazardous waste firm Enva.
In the year ended 31 March 2016, DCC Environmental reported revenue of £153.5 million and operating profit of £15.2 million, whilst generating a return on capital employed of 11.7%.
The takeover of the four businesses by Exponent is expected to complete in the next two months, following receipt of competition clearance from the Irish competition authority.
Commenting on the transaction, Tommy Breen, chief executive of DCC plc, said: “We are pleased to announce the profitable sale of the Environmental division. The business has performed strongly in recent years and we expect it to continue to grow and develop under the ownership of Exponent. I would like to thank all of the dedicated employees of DCC Environmental who have contributed to the success of the division under DCC’s ownership.”
Following the transaction, Exponent has said that the businesses will continue to be led by Tom Walsh, managing director of DCC Environmental.
Exponent will be also appointing Niall Wall – the former chief executive of the glass-maker Ardagh – as chairman, who will be making a significant minority investment in the transaction. Michael Tracey will remain involved in the Business as a Non-Executive Director.
Commenting on the acquisition, Tim Easingwood, Partner at Exponent, said: “We are delighted to be investing in DCC Environmental. The four businesses – William Tracey Group, Oakwood Fuels, Wastecycle and Enva – have each built leading positions in their respective markets, supported by excellent management teams, differentiated service offerings and strong relationships with a broad customer base. Exponent is looking forward to working with the management team to continue to capitalise on the Business’ strong reputation and market positions to unlock its full potential.”
Mr Wall, added: “I am excited to be taking on the role of Chairman of the Business going forward. It is at a pivotal stage of its development, with huge potential for growth. I look forward to working closely with Tom Walsh, his team and Exponent to significantly grow the Business.”