Pennon to sell Viridor for ?4.2bn to Planets UK Bidco Limited

(Sharecast News) - Pennon is planning the sale of its recycling and waste business Viridor to Planets UK Bidco Limited for ?4.2bn.
Pennon said the sale of Viridor will be done on a cash-free, debt-free basis.

It also said that net cash proceeds were to be approximately ?3.7bn at completion, after taking into account debt and debt-like items that will remain with Viridor, and customary costs. There is also the potential for an additional consideration of up to ?0.2bn contingent on future events and outcomes.

Pennon said it would use the cash to reduce the company's borrowings and return some to shareholders. It will also retain some of the funds for future opportunities.

The sale will need an approval from Pennon shareholders and clearance from the European Commission. It is expected to be complete by the summer of 2020.

Commenting on the transaction, Chris Loughlin, Pennon Chief Executive said: " 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.

"On completion of the transaction, Pennon will continue to focus on its sector-leading water and wastewater businesses and will consider further growth opportunities that create value for customers, employees and shareholders."

Planets UK Bidco Limited is a new company established by by funds advised by Kohlberg Kravis Roberts & Co.

KKR is a leading global investment firm that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate and credit, with strategic partners that manage hedge funds.