Waste management firm Biffa (BIFF) has acquired Weir Waste Services for £16.2m to take advantage of its substantial recycling and waste treatment operations.
Weir Waste will be used to broaden Biffa’s services throughout Birmingham and the West Midlands, serving approximately 1,600 customers. The deal will be funded from existing cash and debt facilities.
In the year to 31 May 2017, Weir Waste delivered £16.1m in sales and operating profit of £1.1m.
Shares in Biffa initially rose 4% on the news, but eased back to 237.5p.
SMALL M&A SPREE
Biffa has been busy sealing attractive bolt-on acquisitions to support growth, and these are expected to boost annual sales by £4.9m.
The company has acquired commercialise waste collection businesses H&A Recycling, Bisset Waste Management and Vecta Group with operations in Cornwall, Scotland and East London.
Broker Numis has upgraded earnings before interest, tax and amortisation (EBITA) by 1% to £83m and by 2% in 2020 to £88.5m.
In 2021, EBITA is expected to rise 2% to £92.8m.
BIFFA BOUNCES BACK FROM CHINESE WOES
Currently one of our top picks for 2018, Biffa suffered a setback earlier this year on concerns over a restriction on the export of specific recyclables to China.
Thanks to Biffa’s focus on alternative markets and change in operations to cater for more source-separated materials instead of pre-blended, the share price has rallied 18.4% from a one-year low in May.
