Veolia Environnement To Acquire Cleanaway UK
With £494 million (€684 million) turnover, Cleanaway UK is a major operator in England and Wales in municipal and industrial waste collection and integrated waste management services, supported by a nationwide network of service centers and four landfill sites. It operates a state-of-the-art high-temperature hazardous waste incinerator and two advanced Materials Recycling Facilities at Greenwich and Rainham. Cleanaway UK employs more than 7, 500 people.
Through Veolia Environmental Services, Veolia Environnement is one of the leading waste companies in the world, with activities in Europe, America, Asia and Australia. In the growing UK waste market, operating both in the municipal and industrial sector, with an integrated solutions approach, and active in the PFI segment, as demonstrated by the recent signing of the Nottinghamshire contract. Veolia Environmental Services UK revenues amounted to £500 million (€722 million) in 2005, up 10% from 2004, and growth is expected to be double digit in 2006 before the acquisition.
The transaction reinforces Veolia Environmental Services in all segments of the UK market and expands its Integrated Management Solutions offering.
The acquisition will develop Veolia Environmental Services' municipal business with the addition of new services and contracts, double the size of its commercial dry waste business with enhanced geographic coverage and route density and complement its current portfolio of recycling, treatment and disposal facilities.
The new Veolia Environmental Services entity in the UK will have 2006 pro-forma revenues above £1.1 billion (€1.6 billion) and employ more than 13,000 employees and is expected to post strong organic revenue growth in the short and medium term. It expects significant cost synergies arising from procurement savings, route optimization, depots rationalization and central costs savings.
Including pension and environmental liabilities estimated at £80 million (€115 million) after tax, the transaction price implies an EBITDA multiple of 8.0x before synergies.
The transaction is subject to merger approval by the EU competition authorities.
"The acquisition reinforces our position in the consolidating and fast-growing UK waste sector; it will allow us to accelerate our organic growth in the PFI and industrial sectors through an additional commercial network as well as a strengthened access to local authorities and major industrial companies. With significant revenue and cost synergies in all business lines, the acquisition provides value creative growth..." said Henri Proglio, Chairman and CEO of Veolia Environnement.
SOURCE: Veolia Environnement