DCC yesterday said it had acquired a waste recycling business in the UK for as much as €16.7 million in cash, expanding its reach in the sector and adding to the €87 million already spent on acquisitions this year.
Under the terms of the agreement, DCC will initially pay €8.7 million in cash for a 90 per cent stake in Wastecycle, a Nottingham-based recycling and non-hazardous waste management business. It will then make a further payment of no more than €8 million depending on the performance in between now and March 2010. This sum includes the acquisition of Wastecycle's debt.
Yesterday's announcement comes just five months after DCC bought a 50 per cent stake in William Tracey, the leading recycling and waste management business in Scotland. DCC, which has recently rebranded its Irish environmental subsidiaries under the name enva, has been looking to expand in this area to take advantage of a growing awareness among the public and businesses of the need to dispose of waste in an environmentally-friendly manner.
"As the industry increasingly moves away from landfill, those companies with specialist recycling expertise and facilities are poised for strong growth," said Jim Flavin, DCC's chief executive.
Wastecycle, which employs 96 people, is forecast to deliver operating profits of €2.2 million this year on sales of €16.7 million. At the end of September, the group's net assets were valued at €3.7 million.
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