BSR
BSR
  • Home
  • Distressed Businesses
    • All Distressed Businessess
    • Administrations
    • Liquidations
    • Winding Up
    • Insolvency Advice  New
  • Buy a Business
    • All Businesses for Sale
    • Find a Business for Sale
    • Raising Business Finance
    • Buyer Acquisition Service   New
    • Escrow Service   New
  • Sell a Business
    • Sell Your Business
    • Seller Accounts
    • Need Help Selling?
    • Help With Finance New
    • Business Valuation
    • Business Wanted Adverts
  • Insights & News
    • View All News
    • View All Insights
  • Off-market
    • Source deals
  • Log In
  • Join Now
Join now
11111111

Home / News / Pennon Group mulls acquisitions after Viridor windfall

Pennon Group mulls acquisitions after Viridor windfall

Wed, 31 Mar 2021 | BUSINESS NEWS

Pennon Group mulls acquisitions after Viridor windfall

South West Water owner Pennon Group says it is considering utilising the proceeds from the sale of recycling business Viridor to target acquisition opportunities. In a trading statement, Pennon said it was reviewing reinvesting the Viridor proceeds in potential growth opportunities in the UK's water sector.

If an acquisition is not made, the company said it would make a “substantial return of capital to shareholders.” Pennon said it would seek to clarify this by the time of its full-year results on June 3.

The sale of Viridor to private equity firm KKR last year generated £3.7 billion in net cash proceeds for Pennon. The group used £1 billion to de-gear, leaving it with a “sustainable” £200 million in gross debt. As of today, the company says it has expected cash and facilities “well in excess of £3 billion.”

Regarding its plans, the company said: “Pennon believes there is significant value potential from the reinvestment of the Viridor sale proceeds in the UK water sector and continues to narrow down its review of potential growth opportunities.”

“In the event a major value accretive investment opportunity is not available, Pennon expects to make a substantial return of capital to shareholders.”

Reports have indicated that a likely acquisition target is Southern Water, which Pennon was reportedly mulling a bid for in late 2020. Southern Water has struggled in recent years with high debts and regulatory investigations, with the company being hit with a record £126 million fine from water regulator Ofwat in 2019.

Regarding Pennon’s potential acquisition plans, Steve Clayton of Hargreaves Lansdown commented: “Today's statement is reassuring but necessarily fails to provide full clarity on how Pennon will go about reinvesting the Viridor proceeds. But it looks as though whilst Pennon have not signed a deal yet, they may be reaching for the pen.”

“The group say that by their full-year results on June 3 they will either have announced a deal to acquire another UK water company, and Southern Water is the name most often linked here, or they will make a substantial return of capital to their investors.”

“In an uncertain world, Pennon looks attractive. Either the most effective management team in the sector will get a major new set of assets to work with, or there will be an upfront cash return. Either way, Pennon looks set to have a busy summer ahead.”


Find businesses for sale here.

If you are looking for an exit, we can help!


Share this article



Latest Businesses for Sale

Horticultural Nursery
South West, UK

The company offers a range of specialist gardening and landscaping products and services to both trade and domestic customers, with a particular focus on turf, top soil, mushroom compost, aggregates, cement and sand, and landscape waste services.

Asking Price: Offers Invited
Turnover: £501,000

LEASEHOLD


Provider of Fire Safety Solutions
UK Wide

Benefits from 40 active clients, 80% of whom provide reliable, repeat business. Has an established reputation within its sector as a professional, reliable service provider, utilising a highly experienced workforce with extensive in-house capabilitie...

Asking Price: Offers Invited
Turnover: £2,600,000

LEASEHOLD


Provider of Bespoke Art Conservation & Restoration Services
UK Wide

The company offers personalised services to a growing client base, ensuring all art mounting, conservation and restoration requirements are met by a team of highly skilled specialists. Serving museums, galleries, Government departments and private co...

Asking Price: Offers Invited
Turnover: £695,000

LEASEHOLD



View more businesses for sale

News Search

Latest News

 
03
 
Feb
 

Social media marketing firm acquired at up to 41.6x operating profit | BUSINESS SALE

Manchester-based social media and influencer marketing agenc...

 
03
 
Feb
 

Pub group planning to sell 1,000 sites as pressures on hospitality mount | COMMERCIAL PROPERTY

Stonegate Group, the UK’s largest pub company, is repo...

 
02
 
Feb
 

Babble hits 12 acquisitions in a year with double takeover | BUSINESS SALE

London-based cloud technology firm Babble has continued its ...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Related News

 
21
 
May
 

Biffa agrees £126m deal for Viridor assets | BUSINESS SALE

Biffa has agreed a deal to acquire the collections business ...

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources

Become a Member

News Categories

  • - Business Sale
  • - Division Sale
  • - Administration
  • - MBO/MBI
  • - Merger
  • - Commercial Property

View all news

logo
Our Services Distressed Businesses
  • Businesses for Sale
  • Distressed Companies
  • List a Business
  • Help with Finance
  • Buyer Acquisition Service
  • Small Businesses for Sale
Company Buy a Business
  • About BSR
  • Pricing
  • Insights
  • News
  • FAQs
  • Reviews
Get In Touch
020 8875 0200
[email protected]
167 Oakhill Road, London, SW15 2QW
Working hours: Mon-Fri, 9am - 5:30pm
About BSR
Business Sale Report is the UK's leading
independent business for sale & distressed business listing service.
Established in 1995, BSR offers an up-to-the-minute, comprehensive overview of businesses for sale, latest distressed business listings and daily acquisition news.
Subscribe

Subscribe to our newsletter to receive news about the latest businesses for sale.

  • Terms
  • Privacy
  • linkedin
  • facebook
  • twitter
© 1995-2023. Business Sale Report Ltd. All rights reserved. www.business-sale.com.