TEG significantly expands with £6m acquisition
Composter TEG Group has bought another composting firm Simpro for £6m, increasing TEG’s processing capacity by 180,000 tonnes a year.
Approved by shareholders last week, TEG will now be capable of processing 295,000 tonnes of organic waste each year. The deal will add six operational composting sites to the company’s portfolio, which are located in Stoke, Nottingham, Gaydon, Wolverhampton and Coventry. TEG now owns ten sites.
The deal will see TEG paying £4.85m in cash, £400,000 in shares on completion and a maximum of £750,000 of deferred consideration subject to performance. Simpro will continue to operate as normal as a standalone company.
A recent £5.5m investment by Bridges Ventures in TEG has facilitated the acquisition. The investment will mean Bridges Ventures will own 22.3% of the newly expanded TEG business. Part of the money will fund the development of additional sites in regeneration areas. It is Bridges Ventures’ first investment in a public company.
TEG chairman Nigel Moore said: “In addition to immediate revenues and cash-flow, the acquisition brings tremendous potential for further expansion using TEG’s in-vessel composting (IVC) and anaerobic digestion (AD) technology, allowing us to significantly enhance revenues by securing food waste contracts in the Midlands. Simpro is an ideal fit with TEG and, following the very successful acquisition of TEG’s Carleton Rode site in 2009, we expect this acquisition to enhance the company significantly.”
Midlands-based Simpro currently processes green waste in open windrows, but one of its sites already has planning permission for an IVC facility. Three other sites have the potential to develop IVC and AD plants on them.