KKR buys Viridor from Pennon in £4.2bn deal

The deal gives the company an EV of £4.2bn, which equates to 18.5x its 2018/19 EBITDA.

Net cash proceeds are expected to amount to approximately £3.7bn at completion, after taking into account debt and debt-like items that will remain with Viridor, and customary costs. There is also the potential for additional consideration of up to £200m, contingent on future events and outcomes.

Pennon intends to use the proceeds to reduce its borrowings and make a return to shareholders, while retaining some funds for future opportunities.

KKR acquired the business via a newco named Planets UK Bidco. The transaction is expected to complete in summer 2020.

KKR is a global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds. KKR has $218.4bn in assets under management.

The GP has recently closed its debut Global Impact Fund on $1.3bn. The vehicle is dedicated to investment opportunities in companies providing commercial solutions to environmental or social challenges.

Company
Established in 1957 and headquartered in Taunton, Somerset, Viridor provides recycling and residual waste services to 150 local authorities and corporate clients, as well as 32,000 customers in the UK.

The company has operations across the waste value chain through energy recovery facilities, recycling, landfill and landfill gas, and operates in England, Wales and Scotland with a workforce of around 3,000 staff.

Viridor generated EBITDA of £225.4m from revenues of £852.7m in the 2018/19 financial year.

People
Pennon Group – Chris Loughlin (CEO).

Advisers
Vendor – Barclays (corporate finance); Morgan Stanley (corporate finance).

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