13 May 2006
Pennon Group Plc announces that its subsidiary, Viridor Waste Management Limited, has acquired Wyvern Waste Services Limited, the landfill, power generation and recycling business, from Somerset County Council for £25 million. Viridor has also entered into long-term waste management contracts with the County as a Public Private Partnership (PPP). The acquisition is in line with Pennon Group's stated strategy of expanding its waste management activities, particularly in the areas of landfill, power generation and PFI/PPP contracts.
Wyvern Waste is headquartered in Taunton and comprises: strategically located landfill sites in Somerset with approximately 5.1 million cubic metres consented capacity; landfill gas power generation schemes totalling 7.1 Megawatts (MW) capacity; and associated transfer stations, recycling and collection activities. As a result of the acquisition, Viridor Waste's consented landfill capacity increases to approximately 92 million cubic metres and its power generation to 68MW. The acquisition will be integrated into Viridor Waste's south west region and is expected to be earnings enhancing before amortisation of intangibles in its first full year.
Commenting on the acquisition, Colin Drummond Chief Executive of Viridor Waste, said, "This acquisition fits very well with Viridor Waste's strategy of expanding its landfill, power generation and long term integrated municipal contract businesses in key regions of the UK".
For further information please contact:
Colin Drummond, Chief Executive, Viridor Waste Limited, on 01823 721431
Jo Finely, Investor Relations Manager, Pennon Group Plc, on 01392 443401
Mark Harris, Finsbury, on 0207 2513801
Viridor Waste Management is a leading provider of essential waste and recycling services in the UK. It has core competencies in waste disposal by landfill, the generation of electricity from landfill gas and the operation of materials recycling facilities. It also operates waste transfer stations, civic amenity sites and composting facilities in a number of regions of the UK and has a waste collection fleet of 365 vehicles, a liquid waste treatment plant, and a clinical waste incinerator. Its 25 year waste management PFI with West Sussex County Council has been operating since April 2004 and the current Somerset PPP is its second such long term contract. Through its joint venture with Grundon Waste Management it is building a 400kt/32MW energy from waste facility at Colnbrook west of London.
Viridor's stated strategy is to:
- capitalise on its leading position in waste disposal by landfill;
- exploit opportunities in renewable energy generation; and
- pursue profitable opportunities arising from the UK Government's developing waste strategy.
Following this acquisition, the company has total consented landfill capacity of approximately 92m cubic metres. This capacity is located particularly across the South, North West and East of England, and the Central Belt of Scotland.
Gas produced from landfill sites (landfill gas) is increasingly used to generate electricity. It is a form of renewable energy and now represents around 30 percent of the UK's total renewable energy generation. The UK Government's strategy is to increase the percentage of electricity generated from renewable sources from the current figure of around 4 percent to a target of 10 percent in 2010 and 15 percent in 2015, with an aspiration of 20 percent in 2020. To meet these targets, the UK Government has introduced premium pricing regimes, most recently Renewable Obligation Certificates ("ROCs"), to encourage all eligible forms of renewable energy including landfill gas. Following the acquisition, Viridor has approximately 68 MW of capacity of which around 46 percent is eligible for ROCs.
15 May 2006