The waste industry going through tough times

Deal volumes in the waste industry during the first half of 2012 declined on the same period in 2011. This bucks the continuing trend of volumes seen during that same period for the previous four years.

In 2011 there were 25 deals in the first half of the year compared to 16 in the first half of 2012. In the period 2008 to 2011 there were an average 25 transactions in the first half of each of the four years.

2012 has also seen a number of companies going into administration, most recently Sterecycle, based in Yorkshire, which had a Council contract cancelled. Keith Cornell Waste Paper Ltd, based in Kent, also went into administration last month. Mazars Restructuring team headed by Rod Weston are accompanying both companies in this process. Earlier in the year companies that were acquired from administration included Harpers Environmental Services Ltd, Plastic Sorting Ltd and Chilton Waste Services Ltd.

As pressure on margins remains high, it is hardly surprising that rumours of concentration are spreading in the industry, even for the big players. This triggers intense speculation among investors, as did the latest rumour of merger of Veolia and Suez (owner of SITA UK) last week. The rumour proved incorrect although it was understood that preliminary talks had taken place between the two companies.

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