Energy giant eats up food waste business in £120m deal

Severn Trent has bought renewable energy business Agrivert UK in a £120m deal that will boost the energy giant’s green power division.

Agrivert UK is a leader in renewable energy generation from food waste and the acquisition will add 106 GWh per annum of energy generation to the 354 GWh currently produced by Severn Trent’s broader energy and renewables portfolio.

Liv Garfield, Severn Trent’s chief executive said: “Renewable energy is strategically important to Seven Trent and the UK as a whole as we work towards achieving our decarbonisation targets and delivering attractive shareholder returns.

Agrivert has five food waste anaerobic digestion (AD) plants located between Swansea and Surrey, which will add to Severn Trent’s two food waste plants at Coleshill and Stourbridge. Severn Trent is also currently building a third plant in Derby.

Garfield added: “Agrivert UK strengthens our established presence in anaerobic digestion where we have been leaders in the water sector for many years. We have worked in partnership with Agrivert UK on a number of projects in recent years and have been hugely impressed by their engineering capability and expertise.”

Agrivert UK also has five green and comingled waste composting sites, located to the south and west of the Severn Trent region.

In 2017 Agrivert UK generated £10m earnings on revenues of £26m.

Alexander Maddan, Agrivert’s chief executive said “As we finalised the latest expansion of our AD fleet, it was a natural juncture to create an even more competitive business by combining Agrivert UK with the Severn Trent Group.

“Our familiarity with the Severn Trent Group gives us great confidence that the Agrivert UK business is being transferred into good hands, allowing Agrivert Limited to concentrate on the engineering and overseas markets.”

EY corporate finance acted as sole financial adviser to Severn Trent.