The waste and resource management sector is due to get a boost of £7 billion over the next six years according to a new investment report produced by LRS Consultancy and Catalyst Corporate Finance.
The mergers and acquisitions report was launched on Wednesday, 6 March 2013 at an invite-only event with 50 senior members from the resource management and investment industries. The attendees participated in a lively debate about the future of investment in the sector with a clear message that this investment will be seen in mid-market, regional businesses that provide the best local solutions.
Key for those seeking private investment is a greater understanding of what investors are looking for. There is currently a gap between the way businesses in the sector present themselves to funders and what funders are actually looking for.
Mark Wilson of Catalyst explained, “The waste sector has developed into a highly sophisticated industry and management teams need to recognise and increase their skill level to meet the needs of this rapidly changing environment. Potential investors need to be confident that the business has a strong management team or has identified the areas where it is lacking and has taken steps to rectify this.”
Dee Moloney, LRS Managing Director, said “There are an increasing number of new entrants into the sector and a growing complexity of supply chains where there are competing objectives and priorities and new ways of managing relationships and contracts to drive material out of landfill and through a collection route for recycling, reprocessing and re-manufacturing.” She highlighted the need for commercial due diligence to help businesses and investors to understand the intricacies of the market place, including the current and future trends, changing policy and legislation, feedstock availability and suitability, outlet availability, competition and financial models.
It was recognised by the audience that a new type of investor is being attracted to the sector with different return expectations and greater interest from private equity. There was also a call from the industry for investors to take more risk and the recognition that there is a need to look at waste management as a local issue with opportunities for different levels of investment, which will in turn prove attractive to new investors.
A free copy of the report: Waste & Resource Management M&A Report can be made at: http://bit.ly/YRDG7q