Severn Trent buys organic waste recycling company Agrivert
Severn Trent has announced the purchase of Agrivert Holdings Ltd and its subsidiaries containing the UK operating businesses for a total consideration of £120 million.
Facts about Agrivert UK:
- Agrivert has been at the forefront of the organic waste recycling market for 20 years
- They have long term strategic contracts with local councils and 20-year renewable energy subsidies backed by HM Government
- They specialise in operating facilities to process and recycle organic matter, processing over 310,000 tonnes of solid organic waste in 2017
Facts about Severn Trent Green Power:
- Severn Trent Green Power was established in 2009 to utilise the experience gained in anaerobic digestion across a broader portfolio of assets
- It has grown successfully to include two food waste anaerobic digestion plants, a crop anaerobic digestion plant, six wind turbines and 33 solar sites
- In the last full financial year ended 31/03/18 Severn Trent's Food Waste business recorded revenue of £13 million and EBITDA of £3 million
- Severn Trent Green Power is part of the Business Services segment of Severn Trent Plc, separate from the Water and Waste Water business regulated by Ofwat
Founded in 1994, Agrivert UK is a leader in renewable energy generation from food waste, with five well-established food waste anaerobic digestion (AD) plants and five green and comingled waste composting sites, located to the south and west of the Severn Trent region.
Agrivert's UK operations will be added to Severn Trent's existing non-regulated Green Power Business, and will be reported within the Business Services segment.
The plants will complement Green Power's two operating food waste AD plants at East Birmingham (Coleshill) and West Birmingham (Roundhill) and one under construction in Derby (on track for commissioning by the end of the financial year).
The acquisition will add 106GWh per annum of energy generation to the 354GWh currently produced by Severn Trent's broader energy and renewables portfolio.
The purchase of Agrivert UK will take Severn Trent's investment in energy and renewables to approximately £300 million by 2020, reflecting its commitment to become a sector leader in sustainable resource efficiency, whilst driving down carbon emissions.
Liv Garfield, Severn Trent chief executive, said: "We're delighted to welcome Agrivert UK into the Severn Trent Group. Renewable energy is strategically important to Seven Trent and the UK as a whole as we work towards achieving our decarbonisation targets and delivering attractive shareholder returns.
"Agrivert UK strengthens our established presence in anaerobic digestion, where we have been leaders in the water sector for many years. We have worked in partnership with Agrivert UK on a number of projects in recent years and have been hugely impressed by their engineering capability and expertise."
Alexander Maddan, Agrivert's chief executive, said: "As we finalised the latest expansion of our AD fleet, it was a natural juncture to create an even more competitive business by combining Agrivert UK with the Severn Trent Group.
"Our familiarity with the Severn Trent Group gives us great confidence that the Agrivert UK business is being transferred into good hands, allowing Agrivert Limited to concentrate on the engineering and overseas markets."
The total enterprise consideration is £120 million, subject to customary closing adjustments, which will be paid from existing cash and bank facilities, including the repayment of approximately £60 million of debt at closing.
In the last full financial year ended 31 December 2017, the acquired Agrivert businesses recorded revenue of £26 million and EBITDA of £10 million.
It is anticipated the transaction will be completed by the end of the calendar year.
EY Corporate Finance acted as sole financial adviser to Severn Trent.
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