Severn Trent PLC (LON:SVT) is splashing out £120mln to buy organic waste recycler Agrivert Holdings Ltd as the blue-chip water firm expands its renewable energy business.
The group noted that Agrivert – founded in 1994 - generates renewable energy from food waste and operates food-waste processing plants and waste composting sites in the UK, located to the south and west of the Severn Trent region.
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It pointed out that the plants will complement the group’s Green Power's two operating food waste AD plants at East Birmingham (Coleshill) and West Birmingham (Roundhill) and one under construction in Derby (on track for commissioning by the end of the financial year).
The firm said the acquisition will add 106 GWh per annum of energy generation to the 354 GWh currently produced by Severn Trent's broader energy and renewables portfolio.
The purchase of Agrivert UK will take Severn Trent's investment in energy and renewables to approximately £300mln by 2020, the group added.
Severn Trent chief executive officer, Liv Garfield said: “Renewable energy is strategically important to Seven Trent and the UK as a whole as we work towards achieving our decarbonisation targets.”
The FTSE 100-listed firm said it will fund the deal with existing cash and bank facilities, with the transaction expected to be completed by the end of the calendar year.