BY Richard Summerfield
Private equity firm Energy Capital Partners (ECP) has agreed to acquire British waste management company Biffa Plc in a deal worth $1.41bn.
Under the terms of the deal, Biffa shareholders will receive 410p per share from ECP-controlled Bears Bidco. Including dividend payments, the offer is 28 percent higher than the FTSE 250 group’s closing price of 325p a share on the day before the June bid was announced, and values Biffa’s equity at about £1.3bn. In June, Biffa’s board said it was “minded to recommend” that shareholders accept the initial 445p offer, however the final deal is worth 7.9 percent less per share than the original offer.
“It is the Biffa Board’s view that this offer represents a compelling opportunity, particularly in a weakening economic environment, for shareholders to realise, in cash and with certainty, the potential for future value creation,” said Ken Lever, chair of Biffa. However, he conceded that the offer was “lower than the proposal previously announced”.
Mr Lever added: “Since IPO in October 2016, the successful pursuit of our growth strategy has seen Biffa expand its leadership position in its I&C collections business and oversee a significant investment programme across UK green economy infrastructure, strengthening its capabilities as one of the leading sustainable waste managers in the UK. ECP is an experienced investor in environmental infrastructure and sustainability assets and offers a supportive environment to accelerate the Group’s further development and growth as a leading enabler of the circular economy.”
“ECP is excited to begin this long-term partnership with Biffa and its extremely talented employees and leadership,” said Andrew Gilbert, partner of ECP. “We intend for Biffa to remain focused on providing the high level of service to which its customers have become accustomed and look forward to supporting Biffa’s strategic initiatives, development, growth and industry leadership.”
ECP is a frequent investor in energy transition, electrification and decarbonisation infrastructure assets that are focussed on sustainability. Founded in 2005, ECP is a global investment firm with more than $26bn in capital commitments from more than 600 limited partners and a portfolio of more than 20 operating equity portfolio companies.
Biffa is one of the UK leaders in sustainable waste management with a significant investment programme across UK green economy infrastructure. The company has a history of private ownership. Biffa was acquired by Severn Trent in 1991 and floated in 2006. Two years later, the company was taken private again by a group of PE investors, before rejoining the London stock market in 2016.
News: UK waste firm Biffa agrees to Energy Capital Partners' $1.41 billion buyout deal