Pennon sells Viridor 


Pennon has agreed to sell waste arm Viridor for £4.2bn to a consortium of buyers advised by Kohl Kravis Roberts (KKR).

Planets UK Bidco will pay £3.7bn in cash, and take  on £500 million in further liabilities, including leases. The victors reportedly outbid rivals including Macquarie Bank’s infrastructure arm and Equitix. Transfer of assets is likely to complete this summer.

Viridor contracts with over 120 local authorities in waste processing. In recent years the company has reported increases in earnings from its energy from waste plants, and believes demand will outstrip supply for years to come.

It is also branching into energy parks, where it can supply adjacent buildings with heat and power, and is also looking at waste-to-hydrogen and plastics-to-power projects.

In Beddington, London last November it signed a 27 MW contract to supply power to a data centre. In Greater Manchester it partners with Highview Power, and in Avonmouth last year completed a £65 million polymer recovery plant.

The sale signals Pennon Group’s exit from solid waste processing, as it concentrates on water utility management. The FTSE-250 quoted entity owns South West Water, where it services 1.7 million customers.

Related stories:

Energy from waste fires profit as Pennon mulls energy parks

Pennon: Only upside from energy from waste

Energy from waste fires Pennon profit; 50% increase planned

Interserve counts cost of energy from waste exit

Government confirms subsidy levels for waste power

Green Investment Bank invests £80m in new energy from waste plant

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