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Hydrodec UK to acquire Eco-Oil

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Hydrocarbon Engineering,

Hydrodec Group plc has announced that its subsidiary, Hydrodec (UK) Limited, has agreed to acquire the business, assets and trade name of Eco-Oil from Eco-Oil International Limited and its subsidiaries for a purchase price of £2.39 million in cash. Completion is conditional upon finalising the release of security over the transferring assets.

The Eco-Oil business is a leading UK waste oil collector and supplier of recycled industrial fuel oil into the power and road stone industries. It is also one of four significant providers of waste management services to the marine industry in the UK, specifically oily water slops or marine pollutant (MARPOL). The Eco-Oil business collected approximately 17.5 million l of used oil in 2014 through its own collection service, and traded a further 9 million l of bulk oil generating revenues of £26.5 million through oil collection, processing and trading activities. In 2014, the business made a £0.9 million EBITDA loss, with sharply lower oil prices affecting margins, but on a more normalised basis generated an average EBITDA for 2013/2014 of £0.65 million. The net asset value of the acquired business and assets was approximately £1.5 million. The purchase price is being financed from the company's cash reserves.

The acquisition of the Eco-Oil business further secures the supply chain for used oil collection in the UK following the acquisition of OSS in August 2013 and underpins Hydrodec's plans to invest in a base oil re-refinery in the UK. The combined businesses will consolidate Hydrodec's position as the UK's leading service provider in used oil collection, products and associated waste services. The combined entity will offer significant opportunities to improve the efficiency of the business model as well as improve a market leading total waste solution for our customers in the automotive and industrial sectors.

Commenting on the acquisition, Ian Smale, Chief Executive of Hydrodec, said: "Both OSS and Eco-Oil are leading brands in their field of operation and their combination will reinforce Hydrodec's commitment to developing a genuinely efficient, sustainable, high quality waste oil and associated waste service that is compliant with all regulation, convenient for customers nationwide and competitive in a fragmented market as well as being profitable in its own right. It is also an important step on our journey to establish the UK's own oil re-refining capability offering differentiated, high quality, renewable or low carbon oils back into the UK."

Adapted from press release by Rosalie Starling

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