Waste management firm Biffa has announced that it has entered into an agreement to acquire the collections business and ‘certain recycling assets’ from Viridor for a cash consideration of c. £126m.
This acquisition is set to expand Biffa’s collections business and recycling capabilities while ‘solidifying its leading position in UK sustainable waste management’, the firm says.
Biffa says this is a ‘unique opportunity’ to acquire a nationwide UK collections and recycling portfolio; highly complementary and accelerating delivery of its strategic objectives.
Michael Topham, Chief Executive of Biffa, commented: “The acquisition of Viridor’s collections business, and certain recycling assets, is a compelling opportunity for Biffa.
“The addition of Viridor’s £85m collections revenues builds on the Group’s strong track record as the leading market consolidator in the highly fragmented I&C collections market.
“In addition, the acquired recycling and treatment assets broadens our coverage and control of materials, strengthening Biffa’s position as one of the largest recyclers of post-consumer materials in UK.
The addition of Viridor’s £85m collections revenues builds on the Group’s strong track record as the leading market consolidator in the highly fragmented I&C collections market
Through the acquisition, the Biffa will acquire Viridor’s nationwide Industrial and Commercial (I&C) fleet of 270 vehicles along with 15 depots across the UK, servicing 21,000 customers, generating £85m of revenue in financial year 2020 (FY20) and completing over 3m lifts each year.
The business will be integrated into Biffa’s existing I&C platform across the UK. The acquisition will add two household waste recycling centre contracts.
The acquisition will also see Biffa acquire a portfolio of recycling and treatment facilities with revenues of £39m (FY20). These are underpinned by long term local authority supply contracts which contain appropriate risk-sharing mechanisms. The facilities include materials recycling, composting and anaerobic digestion – all of which are core capabilities for Biffa. 80% of Viridor’s revenue in this area is from contracts with remaining terms of eight years or more.
Together these assets processed a total of 272,000 tonnes of material during FY20 and will increase Biffa’s control of plastics feedstock into its closed-loop plastic recycling operations with c. 22,000 tonnes of annual long-term supply, underpinning the Biffa’s target to quadruple its plastics recycling capacity by 2030.
Mr Topham added: “When combined with the other investments we have made over the past year across waste reduction, recycling and energy recovery, we have positioned the Group as a leading enabler of the UK circular economy, ready to tackle the UK’s waste challenge. We look forward to welcoming our new colleagues from Viridor to Biffa in due course.”