Future Biogas has taken full ownership of six UK anaerobic digestion facilities after agreeing to pay £104m for the remaining 49% stake held by Foresight Environmental Infrastructure. The acquisition completes a two-stage transaction that began in August 2024, when the 3i Infrastructure-backed company acquired an initial 51% interest. Future Biogas plans to use the consolidated ownership to accelerate investment in production capacity and operational improvements.
The six gas-to-grid plants convert organic materials into biogas through anaerobic digestion, with the gas upgraded for supply into the energy network. These facilities sit within an industrial sector that connects agricultural materials, waste management, renewable energy generation and gas infrastructure. Their performance depends not only on the amount of organic feedstock available but also on operating efficiency, plant uptime, gas quality and the arrangements for selling production.
Future Biogas says earnings before interest, tax, depreciation and amortisation across the portfolio have increased by around 21% since it acquired control in 2024. That figure relates to the six plants rather than the entire Future Biogas business, and it describes growth under the existing majority ownership structure. Management has identified further opportunities to expand capacity and improve operations, although the company has not specified the investment required for every proposed initiative or guaranteed the resulting increase in output.
The £104m consideration is consistent with the valuation expectations published by 3i Infrastructure in September. Funding will initially come from an equity commitment by 3i Infrastructure alongside existing cash at Future Biogas. The owners plan to refinance the company’s capital structure, with most of the equity funding expected to be returned before 3i Infrastructure’s financial year-end in March 2027. The refinancing is an intended next step and should not be described as already completed.
The transaction also changes Foresight Environmental Infrastructure’s financial position. The seller says the price is 7.5% above its June 2026 valuation of the stake and represents a 38% increase in its value since the original majority sale. It reports an investment internal rate of return of 12.9% and a multiple of invested capital of 1.9 times. Foresight intends to apply proceeds to reducing drawings under its revolving credit facility, creating capacity to meet existing commitments and invest elsewhere.
For Future Biogas, shifting from majority control to sole ownership removes the need to coordinate major decisions with a minority equity partner across the six facilities. That may simplify approvals for equipment upgrades, capacity additions and future financing. The business will still operate within environmental permits, grid specifications, commercial feedstock arrangements and the practical constraints of existing plants. Full ownership does not by itself alter those requirements, but it may make investment decisions quicker to implement.
The financing sequence introduces considerations for both the operating company and its infrastructure backer. Interim equity allows the transaction to complete, while subsequent refinancing is intended to return capital and establish a more permanent balance-sheet structure. The appropriate level and cost of debt will depend on expected earnings, maintenance spending and the stability of operating cash flows. Plant expansions may require further capital before revenue increases. Foresight’s disposal also demonstrates how infrastructure investments can be monetised without necessarily closing the underlying renewable-energy operations. Different owners may see distinct opportunities in continuing to operate, finance or develop the same assets.
The transaction gives Future Biogas direct control over capacity expansion and operating improvements at six gas-to-grid sites whose EBITDA has already grown by approximately 21% since it took majority ownership in 2024. Foresight says the disposal proceeds will reduce its revolving-credit-facility borrowings, releasing capital for existing commitments and further infrastructure investments. The plants will continue to operate within the UK biomethane market, where the economics of additional output depend on feedstock contracts, processing efficiency and applicable support arrangements.
You must be logged in to post a comment.