Devon-based utilities giant Pennon has entered into an agreement to sell Viridor, its recycling and waste business, for a huge sum of more than 拢4 billion.
Taking the business on is Planets 海角视频 Bidco Limited (Bidco), a newly formed private limited company established by funds advised by American global investment firm Kohlberg Kravis Roberts & Co. L.P (KKR).
The sale of Viridor for 拢4.2 billion is on a cash-free, debt-free basis, with Pennon intending to use the net cash proceeds to reduce Pennon鈥檚 company borrowings and make a return to shareholders, whilst retaining some funds for 鈥榝uture opportunities鈥.
Commenting on the transaction, Chris Loughlin, Pennon Chief Executive said: 鈥淔ollowing a detailed review of the Group鈥檚 strategic options, we are pleased to announce the proposed sale of Viridor for an Enterprise Value of 拢4.2 billion.
鈥淭he 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.
鈥淥n 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.鈥
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.
The sale was unanimously agreed by the Pennon Board to be in the best interests of shareholders.
Want more business news straight to your inbox?
BusinessLive is your home for business news from around the country - and you can stay in touch with all the latest news through our email alerts.
You can sign up to receive morning news bulletins from every region we cover and to weekly email bulletins covering key economic sectors from manufacturing to technology and enterprise. And we'll send out breaking news alerts for any stories we think you can't miss.
Visit our email preference centre to sign up to all the latest news from BusinessLive.
Pennon, which also owns South West Water, has said it will continue to pursue operational excellence and growth within the 海角视频 water industry.
Tara Davies, partner and EMEA head of infrastructure at KKR, said 鈥淰iridor is a key part of the 海角视频鈥檚 environmental infrastructure. We expect the company to play a critical role in the years ahead in helping the 海角视频 meet sustainability objectives, by reducing waste to landfill, further developing its energy-from-waste capability and building recycling capacity, particularly in plastics.
"Supporting Viridor in these aims fits with KKR鈥檚 focus on making long-term investments in companies which are addressing major sustainability challenges, and investing in critical 海角视频 infrastructure.鈥
