Severn Trent has announced the purchase of renewable energy generation company Agrivert for a total consideration of £120 million.
The acquisition takes Severn Trent’s investment in energy and renewables to approximately £300 million by 2020.
It will add 106GWh per year of energy generation to the 354GWh currently produced by Severn Trent’s energy and renewables portfolio.
Agrivert’s UK operations will be added to Severn Trent’s existing non-regulated Green Power business and will be reported within the business services segment.
The plants will complement Green Power’s two operating food waste anaerobic digestion (AD) plants at Coleshill and Roundhill – both in Birmingham – and one under construction in Derby – on track for commissioning by the end of the financial year.
The total enterprise consideration is £120 million – subject to customary closing adjustments – which will be paid from existing cash and bank facilities, including the repayment of approximately £60 million of debt at closing.
In the last full financial year ended December 2017 the acquired Agrivert businesses recorded revenue of £26 million and Ebitda of £10 million.
It is anticipated the transaction will be completed by the end of the calendar year.
Commenting on the deal, Severn Trent chief executive Liv Garfield said the company is “delighted” to welcome Agrivert UK into the Severn Trent Group. “Renewable energy is strategically important to Seven Trent and the UK as a whole as we work towards achieving our decarbonisation targets and delivering attractive shareholder returns.
“Agrivert UK strengthens our established presence in anaerobic digestion where we have been leaders in the water sector for many years. We have worked in partnership with Agrivert UK on a number of projects in recent years and have been hugely impressed by their engineering capability and expertise.”
Severn Trent has committed to become a “sector leader” in sustainable resource efficiency, and to drive down carbon emissions.
Agrivert UK was founded in 1994 and has five well-established food waste AD plants and five green and commingled waste composting sites. These are located to the south and west of the Severn Trent region.