South West Water owner Pennon Group has expanded its waste management business with a £23 million acquisition of a Scottish company that recycles fridges, computers, light bulbs and other electrical equipment.

Pennon said its subsidiary, Viridor Waste Management, had bought the Perth-based Shore Recycling Ltd from owners SM Howie, MA Todd and THM Liddell. Pennon expects the European Union's WEEE(Waste, Electrical and Electronic Equipment) directive to drive this market.

The group said the debt-free acquisition was in line with its strategy of expanding its waste management activities and should be earnings-enhancing before amortisation of intangibles in its first full year.

Shore has recycling sites in Perth, Manchester and St Helens on Merseyside, an associated collection fleet and modern purpose-built recycling equipment. Pennon said it would fit well with Viridor's existing operations in north west England and in Scotland.

Viridor's chief executive Colin Drummond said: 'The UK's waste strategy demands ever-increasing levels of recycling, particularly now in the area of waste electrical and electronic equipment.

'Shore has an excellent track record in leading the way in this market in the north of the UK and is well placed to capitalise on this opportunity.' Shares in Pennon rose 1.2%, or 7.5p, to 649.5 pence in early trade.