Compost firm sold in £5.9m deal
MIDLANDS composting firm Simpro has been bought out by Lancashire-based green energy business TEG Group.
The £5.9m cash and shares deal will see TEG acquire the firm which has plants in Wolverhampton, Stoke-on-Trent, Coventry, Nottingham, Telford and Warwick.
The deal will increase the number of TEG plants from four to 10 and treble capacity.
TEG, based in Preston, will pay £4.8m in cash plus £400,000 in shares on completion. A further £750,000 will be paid in shares if the business hits performance targets.
AIM-listed TEG, which specialises in developing and operating organic composting and energy plants, also announced a £6.8m share placing to fund the deal and further capital investment. It will be considered by shareholders later this month.
TEG’s chairman Nigel Moore said: “In addition to immediate revenues and cash-flow, the acquisition brings tremendous potential for further expansion using TEG’s IVC and AD technology, allowing us to significantly enhance revenues by securing food waste contracts in the Midlands region.
“Simpro is an ideal fit with TEG and following the very successful acquisition of TEG’s Carleton Rode site in 2009, we expect this acquisition to enhance the company significantly. TEG is now a truly national business with sites and operations throughout the UK.”
