The acquisition of Shanks’ commercial and industrial (C&I) division will allow Biffa to channel waste volumes into its revamped C&I collection infrastructure, Biffa’s chief executive told MRW.
Ian Wakelin (left) said that since a debt restructuring operation that Biffa concluded in January 2013, the company has been working to reinforce its C&I system.
Buying Shanks’ C&I business was the next step to increase the amount of waste processed through the system and would increase profitability, he added.
Wakelin estimated that Biffa’s C&I business would grow by some 12.5% as a result of the £9.5m deal, which he described as a “quite big transaction” achieved at a “very fine” price.
He was confident that Shanks’ loss-making division would return to profitability in Biffa’s hands because it would be integrated in a larger and more robust infrastructure.
“Their facilities overlap ours. You can create synergies and opportunities to save costs and improve efficiency as a result of putting the two businesses together,” said Wakelin.
Biffa acquired most of Shanks’ C&I facilities. MRFs in Blochairn, Glasgow, and Kettering, Northamptonshire, were not included in the deal because their locations were not strategically interesting for Biffa, according to Wakelin.
He added that after challenging operating conditions last year, the C&I market was on its way to recovery and offered growth opportunities.
“Volumes have now stabilised. We have improved efficiency in our business so it is now more profitable than it was. This acquisition enables us to continue our growth trajectory,” he said.
The expansion of C&I activities, which constituted already 50% of the company’s operations, will not result in a reduction of Biffa’s presence in other sectors, such as municipal, landfill, or energy from waste, assured Wakelin.