KKR is to buy UK recycling company Viridor

KKR is to buy UK recycling company Viridor in a £4.2 billion all-cash deal, marking one of the first large transactions to be agreed during the market turmoil triggered by the coronavirus pandemic. The deal values Viridor, a division of FTSE 250-listed water and waste company Pennon Group, at 18.5 times its earnings in the year to March 2019. The acquisition by KKR’s infrastructure fund comes at a time when global M&A has ground to a near-halt as markets are roiled by the impact of the virus outbreak. Many dealmakers are unable to attend in-person meetings for due diligence and debt markets are struggling… The company will be relatively sheltered from the effects of the pandemic because of its long-term contracts with local authorities, which last as long as 25 years… KKR could potentially own the business for the next 15 years. Viridor, which has 1,200 employees, operates recycling, energy-from-waste and landfill facilities and runs a waste collection service. It has been for sale since September when the company announced a strategic review. The deal values Viridor at £4.2 billion and Pennon expects net cash proceeds of £3.7 billion after taking account of costs and debt…

Kaye Wiggins, Gill Plimmer and Arash Massoudi