Terra Firma

WRG

Description

WRG's principal business involved the sale of landfill void space to municipal and private sector customers. It operated 30 waste "transfer stations" and 71 "civic amenity" sites as well as a renewable energy business.

Strategy

Terra Firma identified that while European harmonisation would gradually move disposal away from landfill, it would never fully remove the importance of landfill as a disposal option. Demand/supply imbalances created over the life of this market shift would allow substantial price and margin growth. WRG's platform would also allow it to engage in large capital projects such as the £17m Allington incinerator which could diversify the business and create value.

Terra Firma also recognised the potential of waste-to-energy as a significant margin driver for the business. Methane is produced when waste decomposes and this can be used to generate power. WRG was outsourcing some of this power generating capacity at significantly lower returns than those available from building its own power division and it had not developed power generation capacity to its full potential.

Outcome

Following the merger with the landfill assets of Shanks and the separation of WRG into a waste disposal division and a renewable energy generator, Terra Firma sold the waste disposal business to a European trade buyer in September 2006. Terra Firma still owns the renewable energy business which has been rebranded as Infinis.

Visit the Infinis website »

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