Drax Group announces sale of UK wood pellet distribution firm

Drax Group, the North Yorkshire-based energy business, has agreed on the sale of Billington Bioenergy (BBE) - a distributor of wood pellets in the UK heating market - to Aggregated Micro Power Holdings (AMPH).

The transaction is set to be completed for £2m, comprising £1.6m of shares in AMPH and £400k of cash.

AMPH is an AIM listed energy company specialising in the sale of wood fuels and the development of distributed energy assets, including biomass boilers and battery storage.

Billingtons supplies around 40,000 tonnes of wood pellet to commercial customers per annum, has four depots, a head office in Liverpool and employs 34 staff. The company has a fleet of 16 specialised vehicles and serves over 1,500 customers.

As at 30 June 2017, Billingtons had unaudited net assets of £1.5m. In the year ending 31st December 2016, Billingtons had unaudited revenues of £6.8m and a loss before tax of £0.43m, which includes certain management re-charges allocated to Billingtons by Drax.

Through its new shareholding in AMPH, Drax will retain an interest in the UK heating market, whilst gaining exposure to the development of small-scale distributed energy assets.

Dorothy Thompson, chief executive of Drax Group, commented: “We are pleased with the sale of BBE and our investment in AMPH.

“With their leadership in the UK wood pellet heating market, we believe they are the right partner to take forward and grow BBE, whilst supporting the UK’s transition to a low carbon economy. We look forward to working with AMPH.”

Richard Burrell, chief executive of Aggregated Micro Power Holdings plc, added: “We are delighted that Drax has become a long term investor in AMP and we look forward to working with Drax on a range of development projects which should help to expand our assets under management in the distributed energy space.

“Billingtons has built a strong and well-regarded business in the wood pellet market in England over the last ten years and is an excellent fit with Forest Fuels.”

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