Severn Trent announces purchase of UK waste-to-energy company

Severn Trent has announced the purchase of Agrivert Holdings Ltd and its subsidiaries operating in the UK for a total consideration of GBP120 million (US155.4 million). Founded in 1994, Agrivert UK owns five well-established food waste anaerobic digestion (AD) plants and five green and comingled waste composting sites.

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 AD plants at East Birmingham (Coleshill) and West Birmingham (Roundhill) and one under construction in Derby (on track for commissioning by the end of the financial year). The acquisition will add 106 GWh per annum of energy generation to the 354 GWh currently produced by Severn Trent's broader energy and renewables portfolio.

The purchase of Agrivert UK will take Severn Trent's investment in energy and renewables to approximately GBP300 million (US$388.5 million) by 2020, reflecting its commitment to become a sector leader in sustainable resource efficiency, whilst driving down carbon emissions. 

The total enterprise consideration of GBP120 million, subject to customary closing adjustments,  will be paid from existing cash and bank facilities, including the repayment of approximately GBP60 million (US$77.7 million) of debt at closing. It is anticipated the transaction will be completed by the end of the calendar year.

EY Corporate Finance acted as sole financial adviser to Severn Trent.