Viridor, a UK-based recycling and waste management company is to be sold for £4.2billion to Planets UK Bidco Limited, a newly formed company established by funds advised by Kohlberg Kravis Roberts & Co. L.P.
The deal, which was unanimously agreed by the board of Viridor's parent company Pennon to be in the best interests of shareholders, was announced by last Wednesday.
Viridor, which has operated in the waste sector since the early 1990s, provides services to around 150 local authorities and major corporate clients as well as around 32,000 customers across the UK. Viridor has operations across the waste value chain and a focused collections activity supporting the broader Viridor operations. The company employs some 3000 people in locations in England, Wales and Scotland and is headquartered in Taunton, Somerset.
Pennon said the sale 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”.
Net cash proceeds expected to be approximately £3.7 billion at completion, after taking into account debt and debt-like items that will remain with Viridor, and customary costs. Net debt and debt-like items include lease instruments of £0.3 billion and liabilities including provisions primarily relating to the landfill operations of £0.2 billion. There is also the potential for additional consideration of up to £0.2 billion contingent on future events and outcomes.
The transaction is conditional on approval from Pennon shareholders, merger control clearance from the European Commission and certain other conditions, and is expected to complete in summer 2020.
Following the completion of the sale, Pennon will be a UK-focused water infrastructure group, comprising South West Water and Pennon Water Services. The Group said in a statement that it will now continue to pursue “operational excellence and growth” within the UK water industry.