Energy Capital Partners will acquire Biffa Plc for £1.3 billion

LONDON, UK: Energy Capital Partners (ECP), through Bears Bidco Limited, will buy entire issued and to be issued ordinary share capital of Biffa Plc at 410 pence in cash per Biffa Share translating into £1.3 billion.

Biffa Plc is a leader in the UK’s sustainable waste management industry and a key enabler of the UK’s circular economy. The Biffa Group operates across the breadth of the waste management process, including surplus redistribution, recycling, treatment, energy generation, collection and disposal.

Energy Capital Partners has been investing in energy transition, environmental infrastructure, and sustainability-focused businesses for almost two decades.

Energy Capital Partners believes that Biffa fits its investment criteria well due to Biffa’s position as a leader in UK sustainable waste management, underpinned by a strong national brand and extensive service coverage led by an excellent management team and backed by powerful barriers to entry.

ECP also places significant value on the strength of Biffa’s relationships with its broad stakeholder base, its long-term track record, and its central role in supporting energy transition and the circular economy.

Given generally supportive but uncertain public policy in the waste management sector, ECP believes that Biffa requires patient, sustained capital investment predicated on a long-term investment horizon.

With a long-term view of capital allocation, Biffa will be best positioned to thrive in its key markets, which are underpinned by long-term growth drivers including the UK Government‘s policy objectives to increase plastics recycling and re-use, eliminate avoidable waste and achieve 65 per cent recycling of municipal waste by 2035.

These drivers and the importance of effective waste management more generally have been re-emphasised in the 2018 Resources & Waste Strategy, the Waste Management Plan for England published last year, and the Environment Act 2021.

Energy Capital Partners (ECP) intends to support Biffa’s management in their efforts to continue developing the business by investing in the customer offering and future growth of its footprint, both organically and through targeted bolt-on acquisitions, such as supporting Biffa Plc with its plan to consolidate the fragmented I&C collections market in which Biffa is a leader.

ECP believes that, following the Effective Date, it will be able to support Biffa as it continues to deliver on its strategic objectives whilst also enabling Biffa to respond to the structural shift in its industry over the medium to long term.

ECP’s access to patient capital will provide Biffa with the financial backing required to accelerate its growth which will help Biffa Plc deliver its long-term potential.

ECP believes that it is uniquely positioned to accelerate Biffa’s development at this critical juncture and that the Acquisition will provide additional attractive development opportunities as well as a spectrum of greener and more sustainable solutions for Biffa’s stakeholders.

Commenting on the Acquisition, Ken Lever, Chair of Biffa Plc, said: “Since IPO in October 2016, the successful pursuit of our growth strategy has seen Biffa expand its leadership position in its I&C collections business and oversee a significant investment programme across UK green economy infrastructure, strengthening its capabilities as one of the leading sustainable waste managers in the UK.

“ECP is an experienced investor in environmental infrastructure and sustainability assets and offers a supportive environment to accelerate the Group’s further development and growth as a leading enabler of the circular economy.

“Whilst being lower than the proposal previously announced on 7 June 2022, it is the Biffa Board’s view that this offer represents a compelling opportunity, particularly in a weakening economic environment, for shareholders to realise, in cash and with certainty, the potential for future value creation.”

Commenting on the Acquisition, Andrew Gilbert, Partner of Energy Capital Partners, said: “ECP is excited to begin this long-term partnership with Biffa and its extremely talented employees and leadership. We intend for Biffa to remain focused on providing the high level of service to which its customers have become accustomed and look forward to supporting Biffa’s strategic initiatives, development, growth and industry leadership.”