Pennon, which also owns South West Water, announced today (18 March) that a newly formed company, Planets UK Bidco, had been established by funds which are advised by Kohlberg Kravis Roberts & Co LP (KKR), which reportedly had a bid for the company turned down last year (see letsrecycle.com story).
The transaction, said Pennon, still needs approval from its shareholders, merger control clearance from the European Commission and needs to meet certain other conditions. The deal is expected to complete in summer 2020.
Chris Loughlin, Pennon chief executive said: “Following a detailed review of the Group’s strategic options, we are pleased to announce the proposed sale of Viridor for an Enterprise Value of £4.2 billion.
“The transaction is great news for shareholders as it recognises the strategic value that Pennon has developed and nurtured in Viridor over many years and accelerates the realisation of that value for shareholders. On completion of the transaction, Pennon will continue to focus on its sector-leading water and wastewater businesses and will consider further growth opportunities that create value for customers, employees and shareholders.”
Pennon says the agreement “recognises the strategic value of Viridor’s strong, diversified and complementary UK recycling and residual waste management platform and expected growth opportunities”, and it intends to use the net cash proceeds to reduce company borrowings and make a return to shareholders.
Some of the funds will also be retained for future opportunities, Pennon added.
A meeting will be held this afternoon among shareholders to discuss the agreement.