NTR Sells Greenstar UK Unit For £135m
Irish Independent : June 10 2010
By John Mulligan
Diversified utility group NTR has no immediate plans to put its Greenstar business in Ireland back up for sale after it announced yesterday that it had agreed to offload its UK arm in a £135m (€162m) deal.
NTR had been seeking a buyer for both its Irish and UK Greenstar waste-management business, but potential bidders failed to meet the price tag placed on the business here.
The Greenstar division in the UK has been sold to a group that includes London-based private equity outfit Montagu and Global Infrastructure Partners, the controlling shareholder of UK waste-management company Biffa.
Biffa is one of the UK’s biggest waste-management firms. Once publicly listed, it was taken private in 2008 following a £1.7bn private equity deal. Some of Greenstar UK’s executives previously worked with Biffa.
NTR acquired a majority stake in UK-based Materials Recovery in 2003 and later rebranded the business under the Greenstar umbrella. Materials Recovery founder Ian Wakelin has been Greenstar UK chief executive since then.
Speaking to the Irish Independent, NTR group finance director Michael Walsh said the bulk of the £80m in net proceeds from the sale of the UK business would be used to further strengthen NTR’s balance sheet and was not specifically earmarked for any particular projects. About £10m of the gross proceeds was related to the cost of the disposal, with the remainder apportioned to debt at the unit.
He said an offer was put on the table that was “very attractive” in the current climate.
Mr Walsh revealed that the sale of Greenstar UK represented a multiple of 16.5 times EBITDA (earnings before interest, tax, depreciation and amortisation) based on the division’s performance to the financial year just ended in March. On a forward basis, based on projected figures to the end of March 2011, it represented a multiple of eight times EBITDA.
Mr Walsh said it hadn’t been difficult to generate interest in the UK business, but that the difficulty lay in getting a deal over the line given the tough macroeconomic environment.
Proceeds
He declined to say what the €96m in net proceeds from the sale would have on the net cash position of NTR’s balance sheet. At the end of September last year, NTR had cash equivalents of €146.3m on its books, compared to €368.9m a year earlier.
Bord na Mona and the Philip Lynch-led investment group One51 were among the prospective bidders for the Greenstar business in Ireland. Last October, Greenstar acquired the Irish commercial waste and recycling business of Veolia Environmental Services.
NTR controlled Airtricity before selling it to Scottish & Southern Electricity, and also owned the West Link toll road. It has invested in a US-based solar energy business and also
expanded the Greenstar business to the US, where it invested heavily in wind energy and bioethanol projects.