Recycling and waste management giant Biffa is being prepared for a sale.
It is currently owned by Montagu Private Equity and Global Infrastructure Partners, and The Telegraph newspaper has reported that Veolia, Suez (owner of SITA) and Pennon (owner of Viridor) are all involved in negotiations to buy the company.
A source close to Biffa confirmed to SCM that Goldman Sachs had been appointed to review business operations, which could include a sale. They also said that it wouldn’t be illogical for the above companies to be interested in buying the company, but other firms could also be involved.
Biffa was bought by Montagu Private Equity and Global Infrastructure Partners for £1.2 billion in 2008.
In 2010, Biffa paid £166 million for Greenstar and this has performed well, but not enough to reposition the company as profit margins in its landfill business have fallen.
It is understood that the owners of Biffa are considering selling the company for almost nothing in return for a share of any merger synergies that could be as much as £50 million per year.
Biffa reported £850 million revenue and £150 million earnings before interest, tax depreciation, amortisation and provisions in the year ending March 2012.
But it also has debt of around £1 billion and is working to meet banking covenants due in June.