5th January 2019
Red Industries has acquired the share capital of waste management company, Environmental Resource Group (ERG).
The acquisition of Midlands based ERG, is a further strategic step in expanding and strengthening their position as one of the UK’s leading independent waste management businesses, with future aspirations of growth.
The acquisition includes ERG’s waste facilities in Brownhill and Dudley, laboratory, offices, employees, and customer base. The acquisition strengthens their position in the market place – broadening their customer reach and service offering, adding additional waste management facilities, a larger client support team, and fleet of bespoke vehicles. ERG will benefit from Red’s market-leading operations, significant processing capability and highly experienced client service platform. ERG (including Chemtech Waste Management Ltd, Chemtech Industrial Services Ltd, Blendcheck Ltd, Boxclever Total Waste Management Ltd, Hazchem Waste Disposal Ltd, Safeguard Environmental Ltd, Envirosol Ltd), will continue to operate as a wholly owned business under the branding of the Red Group.
Commenting on the announcement Adam Share, CEO and founder of Red Industries, said: “We are proud to incorporate ERG into our business. It was clear from ongoing discussions that our companies are well matched and aligned in terms of strategy, ethos, and focus for the future. The acquisition of ERG complements Red’s existing waste management activities and secures more regional and national coverage in line with our growth strategy.”
A £39m funding package, from BGF, the UK’s most active investor in growing businesses, and HSBC, has initially supported Red Industries with the acquisition of ERG. Following an introduction by BGF, Alex Sleeth will join Red Industries as Non-Executive Chairman, bringing 19 years’ experience operating at Board Level across a wide range of business services sectors. Adam Share said: “The acquisition of ERG will help us develop the platform to grow the business even further, and we’re delighted to have BGF on board as partner through this next stage of growth.”
Aaron Baker, an investor at BGF who joins the board of Red Industries, comments: “We’re thrilled to be partnering with Red at such an exciting stage of their journey. Adam and the team have built an exceptional business over the last few years, and ERG is a great addition to the group. We’re looking forward to help Red realise their ambitious growth plans over the next few years and continue to innovate in finding sustainable solutions for their clients.”
The investment was led for BGF by Aaron Baker, Olly Cutting, Stephen Murray and Gurinder Sunner.
The advisors to the transaction were:
BGF: Higgs and Sons Solicitors
HSBC: Keebles LLP
Red Industries: Castle Square Corporate Finance, Wake Smith
Dow Schofield Watts and TAP provided financial and tax due diligence for the funders
ERG: Quercus Corporate Finance, Duane Morris LLP