Biffa PLC buys bin collections business from Viridor Waste Management

Biffa PLC (LON:BIFF) has agreed to buy the waste collections business and some recycling assets from Viridor Waste Management Ltd for £126mln.

This acquisition expands its collections business and recycling capabilities, said Biffa in a statement, while “solidifying its leading position in UK sustainable waste management”.

These Viridor divisions, part of a wider waste management business bought by private equity firm KKR from Pennon Group for £4.2bn last year, generated revenues of £85mln in 2020 stemming mostly from bin collections for local councils with a further £39mln from waste recycling and treatment facilities.

Biffa said it believes it can increase route density in line with its plan to boost collection efficiency from 2019 by a further 20% by 2030.

The waste group is targeting savings of at least £10mln and improved efficiencies to help drive margin enhancement across the Viridor Collections operations, said the statement.

Synergies will include the removal of duplicate vehicle routes and depots where appropriate, as well as efficiencies in back office and procurement.

Biffa’s collections division has been growing steadily through acquisition and generated net revenues of £871mln in 2020 (prior to the COVID-19 pandemic) compared with £350mln in 2014.

Michael Topham, Biffa’s chief executive, added: “The acquisition of Viridor’s Collections business, and certain recycling assets, is a compelling opportunity for Biffa.

“The addition of Viridor’s £85m collections revenues builds on the group’s strong track record as the leading market consolidator in the highly fragmented I&C [Industrial and Commercial] collections market.”