A significant 39 M&A deals were completed in 2008 and 66 per cent of all M&A were within the recycling portion of the entire waste sector.
Grant Thornton’s Waste Sector M&A review predicts £8bn in revenue for 2009 in the waste sector, which is expected to increase to £10bn by 2012, due to the Government’s commitment to investing in low carbon projects.
Grant Thornton corporate finance partner Ali Sharifi said: “The 10 deals completed in the first quarter of 2009 suggest we are on track to exceed last year’s performance.
“While showing some resilience to the recession, the waste sector has not been immune and the increasing number of opportunities involving distressed waste sector businesses for those with access to funds is likely to contribute to what could be new record M&A volumes in this sector in 2009 and beyond.”
In 2008 the acquisitions added up to £1.9bn, which was more than twice as much as the previous year of £858m. However, it did not reach the 2006 figure of £2.25bn.
EU legislation and the increased activity of local authorities trying to meet these targets has lead to further consolidation in the waste sector. Furthermore, these targets have meant availability of long-term contracts, which have been more attractive to financial investors.