Severn Trent Water has acquired energy-from-food-waste firm, Agrivert Holdings and its subsidiaries containing the UK operating businesses in a £120 million deal.
According to Severn Trent, Agrivert UK has long-term strategic contracts with local councils and 20-year renewable energy subsidies backed by the Government. It has five food waste anaerobic digestion (AD) plants and five green and comingled waste composting sites, in the south and west of the Severn Trent region. They will be added to Severn Trent's existing non-regulated Green Power Business, and will be reported within the Business Services segment.
The acquisition will add 106 GWh am year of energy generation to the 354 GWh currently produced by Severn Trent's broader energy and renewables portfolio. And it will take Severn Trent's investment in energy and renewables to about £300m by 2020.
The £120 million transaction is subject to closing adjustments, which will be paid from existing cash and bank facilities, including the repayment of some £60m of debt at closing. The deal is scheduled for completion by the end of the calendar year. EY Corporate Finance acted as sole financial adviser to Severn Trent.