Pennon (PNN) has announced that it will be selling its waste management business, Viridor, to US private equity group Kohlberg Kravis Roberts (KKR) for an enterprise value of £4.2bn. The price tag is more than 18 times adjusted cash profits recorded by Viridor last year. Subject to shareholder approval and clearing regulatory hurdles, the deal is expected to complete in the summer.
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Net cash proceeds from the disposal will amount to £3.7bn, with £500m of debt remaining with Viridor. KKR could fork out another £200m “contingent on future events and outcomes”. A portion of the proceeds will be returned to shareholders, likely via a special dividend.
