Sovereign Capital announces the £22.5 million sale of Churngold Holdings

Sovereign Capital Limited ("Sovereign Capital"), the independent mid-market UK private equity provider announces that it has sold Churngold Holdings Limited, the waste management and recycling business for a total consideration of £22.5m to Viridor Waste Management, a subsidiary of Pennon Group plc. Sovereign Capital achieved a six year IRR of 25% on its investment, a 3.1x money multiple.

Sovereign Capital originally backed the £5.6m management buy-in of Churngold in 1996 and provided a further £2m of development funding three years later to support its buy and build strategy. The funding enabled significant asset investment and the development of a regional waste and environment business which is now ranked as the third largest independent in the UK.

Post this sale, Sovereign Capital will maintain its interest in the remediation business of Churngold, focusing on the regeneration of contaminated land.

Commenting on the disposal Andrew Hayden, a director of Sovereign Capital said:"When we invested in Churngold, we recognised the platform potential and strong cashflow which has enabled the development of a highly successful regional waste management and recycling business."
"We are delighted to have achieved a very successful exit in what is clearly a difficult M&A market. This reflects the quality of the business that has been developed over the last six years. This is a perfect example of Sovereign Capital's focus on developing and growing businesses rather than simply using financial instruments to generate returns."