The US investor KKR plans to start the sales process for its British recycling company Viridor in September. The aim is to benefit from the ongoing high demand for infrastructure assets. The company, acquired by KKR from the publicly traded Pennon Group for £4.2 billion amidst the Corona market disruptions in 2020, could be valued at around £7 billion including debt.
According to people familiar with the matter, CK Hutchison's infrastructure subsidiary and the British investor Equitix are among the potential bidders, with other interested parties not being ruled out. In the fiscal year ending March 2024, Viridor generated revenues of £579.4 million and a pre-tax profit of £153.6 million. In addition to recycling and waste management, the company operates a carbon capture storage project in Runcorn, which can hope for government support.
Interest in British infrastructure projects has grown significantly in recent years – mainly due to stable, government-secured revenues. However, the sale of larger assets has recently become more difficult, as takeovers and IPOs have stalled. Analysts like Colm Gibson of the Berkeley Research Group still see good opportunities for a competitive bidding process, provided the price is right.
CK Infrastructure Holdings is among the largest infrastructure owners in the United Kingdom and holds interests in Northumbrian Water and UK Power Networks. Equitix manages nearly 12 billion pounds and already holds 35% of Viridor's energy-to-waste division with eleven locations in the UK. KKR, CKI, Equitix, and Viridor declined to comment on the sales plans.
