Hydrodec Group plc, the cleantech industrial oil re-refining group, has announced the acquisition of the principal business and assets of OSS from the administrators of OSS Group Limited (and certain of its affiliates) for a purchase price of GBP4.65 (US$7.38) million in cash.

The OSS business is the UK's largest collector, consolidator and processor of used lubricant oil and seller of processed fuel oil, processing approximately 60 million litres of used oil in 2012.

It has a national network of oil storage and transfer stations, currently serviced by a fleet of more than 90 trucks which collect used oil and other garage workshop waste from over 30,000 customers.

Used oil is converted into processed fuel oil at OSS's plant at Stourport and principally sold on to the UK quarry and power industry. OSS's existing senior management team led by Iain Lees will be joining Hydrodec together with approximately 200 existing employees.

The current OSS business generated revenues of GBP28.5 million in 2012 and a normalised EBITDA(1.) of approximately GBP1 million; the net asset value of the acquired assets is assessed at approximately GBP4.5 million.

The purchase price is being financed by way of a short term revolving credit facility. Management expect the transaction to be EBITDA accretive to the Hydrodec Group within two months of the acquisition (after transaction costs have been incurred) and accretive to earnings overall in 2014.

The combination of OSS's access to used oil together with its operating capability makes it an ideal partner for Hydrodec to utilise Hydrodec's existing transformer oil technology and to develop and deploy its new lubricants re-refining technology in the UK, according to a statement by Hydrodec.

Hydrodec's plants are located at Canton, Ohio, US and Young, New South Wales, Australia.