VIRIDOR, a subsidiary of waste management group Pennon, has bolstered its recycling business after completing a £23.8m acquisition of Reconomy Recycling Solutions.
The acquisition is part of Viridor’s plans to expand its recycling business, which will be bolstered by Reconomy’s East Anglia and South Midlands operations.
Colin Drummond, chief executive at Viridor, said: “The UK’s waste strategy demands ever increasing levels of recycling.
“This acquisition has an excellent geographic and business fit with Viridor’s existing operations and is expected to be earnings enhancing before amortisation of intangibles in its first full year.”
Drummond said that recycling now accounts for 15 per cent of the company’s profits.
The Reconomy acquisition marks the third company Viridor has bought in the last three years.
In June 2009, the group acquired London Recycling for £11m and a month later took over Intercontinental Recycling for £8.1m.
Reconomy produces approximately 150,000 tonnes of recycled material every year and has facilities in Wellingbrough, Cambridgeshire and Corby, near Northants. Viridor is one of two subsidiaries of the Pennon Group, which also owns South West Water.
Profits at Viridor were up last year by 34.8 per cent to £55.4m.
In May, Pennon announced that it would increase its dividend payments by four per cent a year for at least the next five years after delivering a 14.2 per cent hike in profits last year.
Chairman Ken Harvey said: “[We] remain well positioned to continue to deliver shareholder value.”
Its shares closed one per cent higher at 554p yesterday.