Stobart ties up biomass deal

24th Mar 2010 14:22

Logistics group Stobart has taken a controlling interest in newly formed Stobart Biomass Products together with AW Jenkinson Forest Products, the largest supplier of wood related biomass in the UK. Under the terms of the deal, Stobart will take a controlling interest in the new venture for £30m comprised of £15m cash and the remainder by the issue of 11,278,195 new ordinary shares in Stobart Group.The new company has been created to source and distribute, on a long-term contractual basis, supplies of biomass fuel to the UK renewable energy market.In addition, Eddie Stobart has secured a major transportation contract with AWJFP for the next ten years. This contract is expected to generate an additional pre-tax profit of £19.25m over the first five years. The investment and new contract together will provide substantial strategic synergies across the Stobart Group. Separately, Stobart expects to benefit from £30m per annum transport revenues from SBPL within three years.