M&A waste sector deals halve in Q3 2009
M&A deal volumes in the waste sector fell by over 50% in Q3
2009, according to financial and business adviser Grant Thornton UK
LLP's latest quarterly update on waste sector M&A activity.
Deal volumes in Q3 2009 declined to only 5 deals when compared
with the volumes seen in each of the first two quarters of 2009
where 13 transactions in Q1 and 11 deals in Q2 2009 were seen.
Additionally, deal volumes in Q3 were down by 64% compared to those
that took place in the same period (Q3) in 2008 where 14
transactions took place.
Despite the fall in deal volumes, 2009 saw a higher proportion
of disclosed deals in the sub £10 million value range, with all
disclosed deals in Q1 and Q3 sitting within this region. The
highest disclosed deal value to date has been £27.5m, compared with
the significantly more £1.2bn in 2008.
In Q3 2009, consolidation in the recycling sector continued to
drive acquisition activity, with this sub sector accounting for 80%
of deals. The remaining 20% was driven by hazardous and industrial
waste transactions.
So far this year, (to September 2009) recycling deals led the
charge of M&A activity (46%) followed by hazardous and
industrial waste (28%) and waste to energy transactions
(10%). The numbers of organic and plastic waste recycling
deals increased against the previous year, overtaking WEEE (Waste
Electrical and Electronic Equipment) and metal as the most sought
after material types.
Ali Sharifi, Partner and Head of Waste Management at Grant
Thornton, said: "Despite the decline in deal volumes in Q3,
transactions remain on track to at least equal the 39 deals that
completed in 2008. At the end of September 2009, 29 waste deals
were completed.
"The number of deals seen so far this year is satisfactory and
highlights the significant opportunities in the waste sector for
those with access to funding in the current market.
"Hazardous and industrial waste remains an area of interest with
M&A deal activity in this area increasing since 2008, but one
to watch is organic waste, with growth being driven by legislative
changes and attractive financial incentives."
For further information, please contact:
Stephanie Aneto, Grant Thornton press office, tel: 020 7728 2940 or
email: stephanie.aneto@gtuk.com