Waste management company Biffa has announced it is selling one of its divisions for £350 million.
The firm is opting to sell the division that generates electricity from landfill gas. The proceeds will be used to build a series of high-tech recycling plants across the UK, according to reports from industry insiders.
The business is the second largest landfill gas generator and has about ten per cent of the UK market. It currently has a capacity to generate around 100 megawatts from landfill gas that it burns in small power plants to produce the electricity.
Industry sources claim that Deutsche Bank, who is acting as Biffa’s advisor in the sale, has been sending out ‘teasers’ to potential buyers. It is thought that full information about the sale is due to be sent out within two weeks, although this has not been confirmed by Deutsche Bank.
Potential buyers include Eon, Iberdrola and RWE, which are all established energy firms in the UK. However, another potential group of suitors is the private equity market, and are likely to including players like Terra Firma, 3i and Riverstone.
Analysts claim the business arm up for sale offers steady returns.