1 Apr 2015 07:00
1 April 2015
Hydrodec Group plc
("Hydrodec" or the "Company")
Acquisition of the business of Eco-Oil
Hydrodec Group plc (AIM: HYR), the cleantech industrial oil re-refining group, is pleased to announce that its subsidiary, Hydrodec (UK) Limited has agreed to acquire the business, assets and trade name of Eco-Oil from Eco-Oil International Limited and its subsidiaries for a purchase price of £2.39 million in cash. Completion is conditional upon finalising the release of security over the transferring assets.
Eco-Oil business
The Eco-Oil business is a leading UK waste oil collector and supplier of recycled industrial fuel oil into the power and road stone industries. It is also one of four significant providers of waste management services to the marine industry in the UK, specifically oily-water slops or marine pollutant (MARPOL). The Eco-Oil business collected approximately 17.5 million litres of used oil in 2014 through its own collection service, and traded a further 9 million litres of bulk oil generating revenues of £26.5 million through oil collection, processing and trading activities. In 2014, the business made a £0.9 million EBITDA loss, with sharply lower oil prices affecting margins, but on a more normalised basis generated an average EBITDA for 2013/2014 of £0.65 million. The net asset value of the acquired business and assets was approximately £1.5 million.
The purchase price is being financed from the Company's cash reserves.
Rationale for the transaction
The acquisition of the Eco-Oil business further secures the supply chain for used oil collection in the UK following the acquisition of OSS in August 2013 and underpins Hydrodec's plans to invest in a base oil re-refinery in the UK. The combined businesses will consolidate Hydrodec's position as the UK's leading service provider in used oil collection, products and associated waste services. The combined entity will offer significant opportunities to improve the efficiency of the business model as well as improve a market leading total waste solution for our customers in the automotive and industrial sectors.
Commenting on the acquisition, Ian Smale, Chief Executive of Hydrodec said: "Both OSS and Eco-Oil are leading brands in their field of operation and their combination will reinforce Hydrodec's commitment to developing a genuinely efficient, sustainable, high quality waste oil and associated waste service that is compliant with all regulation, convenient for customers nationwide and competitive in a fragmented market as well as being profitable in its own right. It is also an important step on our journey to establish the UK's own oil re-refining capability offering differentiated, high quality, renewable or low-carbon oils back into the UK."
For further information please contact:
Hydrodec Group plc |
| 020 3300 1643 |
Ian Smale, Chief Executive Chris Ellis, Chief Financial Officer James Hodges, General Counsel and Company Secretary
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Peel Hunt LLP (Nominated Adviser and Broker) |
| 020 7418 8900 |
Justin Jones Mike Bell
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Vigo Communications (PR adviser to Hydrodec) |
| 020 7016 9570 |
Patrick d'Ancona Chris McMahon |
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Notes to Editors:
Hydrodec's technology is a proven, highly efficient, oil re-refining and chemical process initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. Spent oil is currently processed at two commercial plants with distinct competitive advantage delivered through very high recoveries (near 100%), producing 'as new' high quality oils at competitive cost and without environmentally harmful emissions. The process also completely eliminates PCBs, a toxic additive banned under international regulations. Hydrodec's plants are located at Canton, Ohio, US and Young, New South Wales, Australia. In 2013, Hydrodec acquired the business and assets of OSS Group, the UK's largest collector, consolidator and processor of used lubricant oil and seller of processed fuel oil, with a national network of oil storage and transfer stations, currently serviced by a fleet of more than 90 trucks which collect used oil and other garage workshop waste from over 30,000 customers. Used oil is converted into processed fuel oil at OSS's plant at Stourport and principally sold on to the UK quarry and power industry. In line with our stated intention to develop a base oil re-refinery in the UK, we have an exclusive licence agreement with California-based Chemical Engineering Partners (CEP) to develop the CEP wiped-film evaporation and hydrogenation technology in the UK as well as the basic engineering for a 75 million litre per annum capacity base oil re-refinery.
Hydrodec's shares are listed on the AIM Market of the London Stock Exchange. For further information, please visit www.hydrodec.com.