Landfill group to change Hands after £315m takeover

There had been fears a deal would not be completed after an agreement struck in March between Mr Hands and WRG’s biggest shareholder, Kelda, lapsed last week.

But now Mr Hands’ buyout firm, Terra Firma Capital Partners, has agreed to buy WRG - which currently operates two sites in Midlothian at Oatslie and Drummond Moor - as part of its search to acquire businesses with steady returns.

Industry analysts said that, even though the price under the agreement was "disappointing", it was more important that the deal had been done.

And a spokesman for Kelda said the company supported the sale, which fitted in with its plan to dispose of non-core assets and focus on water and waste water.

He said: "As this went on, I don’t think it’s any great surprise to the world that the price is a little lower than had been initially hoped for, but it’s still a substantial premium to where the share price was before Terra Firma came along."

The WRG deal is the first by Mr Hands in the waste industry. He originally made his name as a pioneer financier in the late 1990s by identifying undervalued stock market-listed companies for takeover and turnaround, using a steady cash flow to secure cheap financing.

Buyout specialist Terra Firma uses money from investors and loans from banks to buy companies and then tries to sell them for a profit within five years.

WRG receives, recycles and disposes of more than 11 million tons of waste each year, operating more than 60 landfills and generating sales of 302.5m last year.

However, trading conditions for waste firms have toughened in recent months as higher regulatory costs bite and industrial customers, suffering in an economic downturn, produce less waste.