185 jobs saved in OSS Group sale

OSS Group, the UK’s largest processor of used oils, has been bought in a pre-pack deal that has saved nearly 200 jobs.

The business, which has its headquarters in Knowsley, Merseyside, was sold by administrators at KPMG in Manchester to the oil refining Hydrodec Group for £4.65m.

Just three years ago OSS’s owner, the mid-market private equity house Dunedin, was said to be plotting a sale for around £50m. It bought the business in 2000 for £15m.

Statements by KPMG and London-based Hydrodec, which is listed on the Alternative Investment Market but has its operations in Australia and the US, gave no explanation for OSS’s trading difficulties. According to Hydrodec OSS generated revenues of £28.5m in 2012 and earnings before interest, tax, depreciation and amortisation of £1m.

OSS specialises in collecting and recycling hazardous garage and workshop waste, particularly waste mineral oils, which it recycles into a processed fuel oil product called Gen3. It processed around 60 million litres of used oil in 2012.

The business has a national network of oil storage and transfer stations, including Leeds, and a processing plant at Stourport, Worcestershire. The plants are 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 and sold on to the UK quarry and power industry. OSS’s existing senior management team led by Iain Lees will be joining Hydrodec together with 185 staff.

Hydrodec’s chief executive Ian Smale said: “OSS offers a very exciting new market entry that delivers the key elements of our business development strategy – a strong position in the used oil value chain, a profitable platform for growth with genuine business optionality, and the capability to accelerate deployment of our existing transformer oil technology as well as assist in our technology development.

“The choice of the UK is deliberate, and we believe that Hydrodec’s technology together with the OSS operating platform can offer a transformational solution to a UK environmental problem and in due course offer the potential to extend into other attractive European markets.”

Paul Flint, Restructuring Associate Partner at KPMG, said: “We have achieved an excellent outcome for creditors, employees and other stakeholders following an intense period of marketing the business which, together with our sector knowledge and experience, ensured a highly competitive process.”

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