DCC acquires UK recycling business

ISEQ listed business support company DCC has today announced its acquisition of anther British waste recycling business.

DCC acquired a 90% shareholding in Realpower Limited, the holding company of Wastecycle Limited.

Wastecycle is a Nottingham based, recycling and non-hazardous waste management business, led by its shareholders, chairman, Mike Shearstone and managing director, Paul Needham.

Michael Tracey, managing director and 50% shareholder of the William Tracey group of companies, of which DCC acquired 50% in May 2006, has acquired the remaining 10% of Wastecycle and will join the company’s board.

The initial cash consideration payable by DCC is €8.7m, including net debt acquired.

Further consideration will be payable up to a maximum of €8m based on profits earned in each of the three financial years to 31 March 2010. The total maximum consideration payable is €16.7m.

Founded in 1998 by Mike Shearstone and Paul Needham, Wastecycle is a recycling and waste management business, operating from a licensed recycling and waste management site of approximately 10 acres on the outskirts of Nottingham.

Wastecycle employs 96 people, operates a fleet of 26 waste collection vehicles and has approximately 3,000 waste containers on customers’ premises.

Non-hazardous waste is received on the Company’s site via a combination of the Company’s own collection vehicles and directly from a wide range of commercial, industrial and local authority customers. The Company achieves a high level of recycling with approximately 75% of all waste coming on site being reprocessed and the balance being sent to third party landfills.

The forecast adjusted operating profit of the business for its financial year ending 31 December 2006 is €2.2m on turnover of €16.7m.

At 30 September 2006 the book value of the business’ adjusted net assets was approximately €3.7m.

Chief executive of DCC Jim Flavin said today: “The acquisition of Wastecycle is a further building block in DCC’s strategy to build a significant waste recycling business in Britain. It follows the recent purchase of 50% of the leading Scottish recycling business, the William Tracey group of companies.

"As the industry increasingly moves away from landfill, those companies with specialist recycling expertise and facilities are poised for strong growth.”