BGF invests in Red Industries to fund ERG acquisition

Denise Ko Genovese
03 January 2019

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BGF has made a ТЃ13.9m equity investment in waste management business Red Industries to finance the acquisition of competitor Environmental Resource Group.

BGF invested £13.9m, while HSBC provided roughly £25m in senior loans and working capital facilities, according to a person familiar with the situation.

The funding will initially be used for the acquisition of ERG. The addition of Midlands-based ERG will broaden Red Industries' customer reach and service offering, adding additional waste management facilities, a larger client support team and fleet of bespoke vehicles.

Aaron Baker, an investor at BGF, will join Red Industries' board. BGF has also introduced Alex Sleeth (formerly of infrastructure development group Environmental Sciences Group) as non-executive director.

Company
Red Industries is based in Staffordshire and was founded by CEO Adam Share in 2006. It has grown organically, as well as via acquisition to offer total waste management solutions to its customers. The company is committed to finding environmentally compliant total waste management solutions and acquired a non-hazardous landfill site in 2016, including an on-site power generation plant that converts methane gas into energy. The Red Industries Landfill Communities Fund was set up in 2017 and has funded numerous projects in the surrounding areas.

People
BGF – Aaron Baker, Olly Cutting, Stephen Murray, Gurinder Sunner (investors).
Red Industries – Adam Share (founder, CEO).

Advisers
Equity – Higgs & Sons Solicitors (legal).
Debt – Keebles (legal).
Company – Castle Square Corporate Finance (corporate finance); Wake Smith Dow Schofield Watts (financial due diligence); TAP (tax); Quercus Corporate Finance (corporate finance); Duane Morris (legal).