Sims Limited (ASX:SGM) has entered into a definitive agreement to sell its 50% shareholding in international bioenergy and methane abatement company LMS Energy. 

Sims, which has a $2.66 billion market capitalisation, says the 50% stake in LMS Energy will be sold to Pacific 2023 Holdco A, an entity owned by funds advised by Pacific Equity Partners (PEP). 

The transaction values Sims’ interest in LMS at $272.1 million and includes plans from PEP to support up to $200 million in capital growth initiatives across the bioenergy and methane abatement sectors in the US, New Zealand, and Australia. 

The completion of the sale is anticipated to occur during the second quarter of the 2024 financial year, subject to customary closing conditions and Foreign Investment Review Board (FIRB) approval.  

Commenting on the agreement, Sims Chief Executive Officer (CEO) and Managing Director Alistair Field says: “I am delighted with the terms of the transaction. 

“This strategic move allows us to streamline our business portfolio in line with the asset recycling strategy previously communicated”

This strategic move allows us to streamline our business portfolio in line with the asset recycling strategy previously communicated. The funds generated from the sale will be allocated to strengthen the core metal business to create sustainable, long-term value for our shareholders. 

I would like to express my heartfelt appreciation to the Falzon family for their invaluable partnership over the years. My best wishes go out to the Falzon family as they embark on the next phase of LMS Energy’s growth.”

Sims is an ASX-listed company founded in 1917 that is focused on sustainability. The company touts itself as an enabler of the circular economy that employs 4,400 employees who operate from more than 200 facilities across 15 countries. 

LMS Energy was founded in 1996 and is the owner and operator of 36 biogas-to-energy facilities, 26 biogas flaring facilities, and 6 solar projects that collectively generate about 600,000 megawatt-hours (MWh) of renewable energy and abate 4.6 million tonnes of carbon equivalent annually. 

Write to Adam Drought at Mining.com.au

Images: Sims