Pennon Group enters agreement for sale of Viridor

Pennon Group Plc ("Pennon", or the "Group") has entered into an agreement for the sale of Viridor Limited ("Viridor"), one of the UK's leading recycling and residual waste businesses, to Planets UK Bidco Limited ("Bidco"), a newly formed company established by funds advised by Kohlberg Kravis Roberts & Co. L.P. ("KKR"), for an Enterprise Value of £4.2 billion (the "Transaction").

The collaboration recognises the strategic value of Viridor’s strong, diversified and complementary UK recycling and residual waste management platform and expected growth opportunities

The net cash proceeds expected to be approximately £3.7 billion at completion, after taking into account debt and debt-like items that will remain with Viridor, and customary costs.

The Pennon Board intends to use the net cash proceeds to reduce Pennon’s company borrowings and make a return to shareholders, whilst retaining some funds for future opportunities.   

The Transaction is conditional on approval from Pennon shareholders, merger control clearance from the European Commission and certain other conditions, and is expected to complete in summer 2020.

Chris Loughlin, Pennon Chief Executive said: "Following a detailed review of the Group's strategic options, we are pleased to announce the proposed sale of Viridor for an Enterprise Value of £4.2 billion. The transaction is great news for shareholders as it recognises the strategic value that Pennon has developed and nurtured in Viridor over many years and accelerates the realisation of that value for shareholders.”