Ferrovial has sold its environmental business in Spain and Portugal to PreZero, a company owned by the German company Schwarz (owner of the Lidl supermarket group, among other brands), for 1,133 million euros.
The company headed by Rafael del Pino continues with its divestments. In this case, it has divested its environmental business, which includes the transfer of the environmental and waste collection, treatment and recycling businesses.
This operation is part of the divestment process of its Services division, since the environment area was split off to facilitate its negotiation and sale.
The sale gives this division an enterprise value of 1,133 million euros, which includes equity and debt, according to Ferrovial, as indicated to the Spanish National Securities Market Commission (CNMV).
It will also generate capital gains of 317 million euros for Ferrovial, assuming an equity value of 950 million euros at the time of signing, which could vary slightly due to accounting adjustments between the signing and closing of the transaction.
Final closing of the transaction is pending customary conditions and regulatory approvals by European authorities and is expected to take place in the second half of 2021.
Ferrovial’s Environment division reported sales of €1,018 million in 2020, gross operating profit of €130 million (including dividends) and its backlog reached €2,177 million. The company has a workforce of 16,000 employees and provides essential treatment and recycling services for public and private clients, thanks to the management of 140 plants, where it processes 5.6 million tons of waste each year. It also carries out street cleaning, selective collection and maintenance of green areas in more than 600 municipalities throughout Spain for more than 15 million citizens.
Owner of Lidl
PreZero, which belongs to the Schwarz Group (owner of Lidl, among other brands), is an international environmental services provider with 13,000 employees and some 280 locations in Europe and North America.
«This operation represents a step forward in Ferrovial’s strategic plan, focused on the development of sustainable infrastructures. New technologies, changes in citizens’ habits and social demands make this approach necessary to continue creating value for our shareholders, the company’s stakeholders and the communities in which we operate. We are pleased to leave our Environmental Services business in Spain and Portugal in the hands of PreZero, an international waste management company with the highest ESG standards,» explains Ignacio Madridejos, CEO of Ferrovial.
«The planned acquisition is the next step in the expansion of PreZero, with which we want to extend our activities in Southern Europe. Ferrovial is an excellently positioned company in the field of environmental management and ideally complements PreZero’s portfolio,» according to Thomas Kyriakis, CEO of PreZero.
This sale takes place within the framework of the divestment process of its Services division, which has been hanging the ‘for sale’ sign since 2018 and continues its course in the United Kingdom, Spain, Chile and the United States, the main markets where the company has activities in this business.
Ferrovial conducted a strategic review of all businesses to focus the company’s future on infrastructure, the primary source of value and profitability for its shareholders. As a result of this decision, Ferrovial classified all its Services operations as «available for sale».
In the same direction, the company adopted the Horizon 24 Plan, a strategy for the period 2020-2024 that places Ferrovial’s priority focus on the development, construction and management of infrastructure, together with businesses in mobility, water and electrification. The plan aims for profitability based on annual EBITDA growth of 11%, with a firm focus on excellence, sustainability, innovation, efficiency and the selection of businesses and markets.
The sale of the Environment business in Spain and Portugal is a new step forward in Ferrovial Services’ divestment process, following the sale of Broadspectrum, with operations in Australia and New Zealand, on June 20, 2020.