Ballast Phoenix

The Opportunity
H2 Equity Partners began evaluating a potential investment in Ballast Phoenix in early 2014. Ballast Phoenix was a relatively small but market leading recycling business of incinerator bottom ash (IBA) – a by product of the incineration of non hazardous household waste to generate electricity. As a non-core subsidiary of a distressed Continental European construction conglomerate, a transaction needed to be deliverable and deal with significant carve-out issues relating to shared services, engineering support etc.

At the time of the investment, Ballast Phoenix (based in Bourne – Lincolnshire) was the UK’s market leader in IBA recycling. IBA recycling is a small but fast growing segment of the recycling industry as government and councils actively avoid landfill and promote the incineration of waste. The company operated seven sites and had the ability to grow aggressively provided significant capital expenditure could be funded. The business generated annual revenues of ca. £20 million and was profitable. However, the required capex funding to deliver the growth amounted to ca. 2x the annual EBITDA… and the company had never operated on a truly stand-alone basis.

H2’s Investment and Approach
H2 invested in Ballast Phoenix in July 2014. An aggressive growth plan was developed jointly with management aimed at expanding the number of sites from 7 to 12 within a few years. The ambition was to establish Ballast Phoenix as the only “go to” partner in the UK for the large waste management companies that operate on an (inter)national scale. Within six months Ballast Phoenix managed to secure six new contracts, became the preferred recycling partner for one of the largest energy-from-waste operators in the UK, and raised funding to commence building its new processing factories. During this phase the company not only grew rapidly, but also had to strengthen its management team, introduce management reporting and become a business that could operate on a truly stand-alone basis. Combined with specific improvement actions relating to improved pricing and metal extraction within 12 months there was clear visibility to more than double the company EBITDA in just a few years.

The Outcome
A private equity backed trade buyer approached H2 about acquiring Ballast Phoenix, attracted by its market leading position in the UK and the extremely strong visibility of revenue and profit growth for the coming years. The trade buyer had a clear strategy of combining Ballast Phoenix with its own international operations and management and H2 Equity Partners decided to sell the company with Ballast Phoenix management taking leading positions in the new group.

Henry Stevens

Senior Associate

 

Henry joined H2 in 2024 and is involved in both evaluating new investment opportunities and supporting existing portfolio companies.

 

Prior to joining H2, Henry spent nearly six years at the strategy consultancy firm, Roland Berger, where he was a core member of the Transaction & Investor Services platform supporting private equity and strategic investors across the Industrial and Regulated & Infrastructure sectors predominantly within the mid-market.

 

Henry graduated from the University of Cambridge with a Bachelor (Hons) in Economics. His interests outside of work are road cycling where he competes in time trials, running and skiing.

Terry Musson

The Amberon Group is a market leading traffic management provider to the utilities and Local Authority markets. Amberon was established in May 2002 with our first depot in Paignton, South West England. Our founding core principles remain at the heart of everything that we do and our continued desire to achieve our purpose; to provide the best service in the Traffic Management sector. This has been the foundation for our success and has cemented our position as the market leader in TM.

During the initial transaction we never felt under any pressure & instantly recognised we would become part of the family. H2 took the time to listen to our views & business strategy, it was obvious from the very beginning that they would be the perfect partner for us.

The guys at H2 have enabled us to continue the momentum & have provided the expertise & knowledge to help us continue on the journey to constantly improve our service offering.

Working with H2 during the last 2 years has given us additional support not just financially but the advice & expertise has helped analytically & strategically.

The ambition and the drive H2 have is extremely infectious & continues to assist the group to overachieve.

It’s enormously reassuring to know H2 will always be at the end of the phone to offer advice but heartening to know they have the trust in us to deliver.