The frantic billion pound race to buy waste management firm Biffa has been won by a private equity firm. A consortium led by Montagu Private Equity was revealed as the winner after a rival bid by City financier Guy Hands and the French industrial group Suez which owns Sita was withdrawl at the last moment. The £1.2 billion deal was made by a consortium called WasteAcquisitionco which is made up of Montagu, Global Infrastructure Partner – a coalition of GE Infrastructure and Credit Suisse – and UCIL. A spokesman for Suez said the firm had a view on the value of the assets and was keen not to overpay. Montagu are no strangers to the sector having previously owned Cory Environmental. The City has shown keen interest in the deal because analysts believe PFI deals and long-term contracts with local authorities are set to increase over the long term. The increase in recycling, driven by tough targets from central government and the EU, is also set to benefit the firm. These two factors mean the company is set to see increases in profits and stable growth which will satisfy lending markets which have been hit by the credit crunch. Biffa, which owns 42 treatment and recycling centres, as well as 33 landfill sites, made a profit of £90.7m last year. It handles more than 4m tonnes of waste every year. The company recommended the offer which will go to a shareholders meeting next week for approval. A company statement said: ‘The Biffa board has now been informed by those third parties that they are no longer working towards making a competing offer for Biffa. As a consequence, the Biffa board is now not aware of any third parties who are working towards making such a competing offer.'
