Biffa announces £13.5m Cory collection takeover
Cory says that the sale of its collection arm, Cory Environmental Municipal Services Limited (CEMS), comes after a strategic review by the group’s board concluded that the collection business was no longer core to its aims.
It therefore determined that the long-term future of CEMS would ‘best be secured under new ownership’. The transaction officially came into effect this week (8 June), after a ‘high level of interest’ from various bidders.
The business has been sold to Biffa for an enterprise value of £23 million, delivered as consideration of £13.5 million and an additional cash release to Cory of £1.8 million.
CEMS currently employs around 800 people in the UK and reported total revenues of £34 million in 2015. Through purchasing the company, Biffa will take on four local authority waste and recycling collection contracts in Cornwall, Lincoln, Rutland and Tunbridge Wells.
According to Biffa, the Cornwall contract is ‘one of the largest outsourced contracts in the UK’, covering street and beach cleansing as well as household waste and recycling services.
In addition, Biffa will also take over the provision of commercial waste collection and recycling services to a customer base of around 7,000, mainly in the South West and South East of the country.
Sale an ‘important acquisition’ for Biffa’s position in UK markets
Commenting on the sale, Nicholas Pollard, Cory’s Group CEO, commented: “This transaction follows directly from our strategic review. It will simplify our group structure, enabling us to invest substantially and develop our core business of providing and operating infrastructure for waste management, materials recycling, waste disposal and energy generation…
“Biffa are a natural owner for CEMS, and we wish the business every success for the future.”
Ian Wakelin, Chief Executive of Biffa, added: “This is an important acquisition for us. We believe that it will significantly strengthen our positions in the UK industrial and commercial and municipal market segments, in which we already hold the number one and number two positions, respectively.
“This transaction provides further proof that Biffa is a natural consolidator in the industry, with the technology, scale, reputation and expertise to grow and build upon our market leading positions in the UK.”
According to reports, Biffa is currently considering offers of a £1 billion takeover itself from a number of interested parties, as well as a stock market floatation worth around £950 million.
Despite the uncertainty about its future ownership, Biffa made a number of acquisitions last year, including PHS Chemical Waste, with facilities in Burscough, Stevenage and Atherstone, and Enviroco’s Chemical Treatment Division, providing a hazardous waste fleet and waste transfer facility in Sheffield.
More information about the sale is available on the Biffa website.