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Oakwood Fuels, based in Nottinghamshire, has been sold in a deal worth up to £30m. The company, which collects waste lubricant oil and hazardous waste from businesses, was purchased by DCC Environmental Britain, based in Ireland. Steve Tooley, managing director of Oakwood Fuels, said the move would support the company's rapid expansion plans.

DCC is a sales, marketing, distribution and business support services group. The company completed the acquisition on behalf of its subsidiary, DCC Environmental Britain.

Bilsthorpe-based Oakwood collects refuse from businesses in a variety of sectors and converts the waste oil to processed fuel oil (PFO).

The PFO is then sold to customers for use in a variety of applications including road surfacing operations, aggregate drying, industrial and agricultural drying, power stations, large boilers and furnaces.

Oakwood Fuels was bought for an initial cash consideration of £9.6m on a debt-free, cash-free basis.

Further cash consideration of up to £20m will be paid over the next three financial years to 31 March 2014.

Steve Tooley, managing director of Oakwood Fuels, said: "The evolution of Oakwood in becoming a fuel manufacturer has propelled the business into new markets. The decision to sell the business and become part of a larger group will support Oakwood’s rapid expansion plans whilst DCC's own environmental arm will benefit from the technological expertise in the waste processing sector."

Oakwood, which employs 105 people in Nottinghamshire, recoded adjusted operating profit if £2.2m for the year ending 30 September 2010, on revenue of £9.3m.

Tommy Breen, chief executive of DCC, said: "The acquisition of Oakwood will broaden DCC Environmental’s service offering into additional complementary waste streams in Britain, and capitalise on the trend towards more sustainable waste management and in particular on waste recovery and recycling.

"The acquisition will also enable DCC Environmental's existing British businesses to offer new services to existing customers and the expanded business to leverage an enlarged customer list."

The Sheffield office of Streets Corporate Finance advised Oakwood Fuels on the deal.

Victoria Gribben, director of corporate finance at the firm, said: "Oakwood has seen strong growth as a result of significant investment and development of new technological processes over the last couple of years. By joining DCC and remaining under Steve Tooley’s command, the business has an exciting future both in the UK and overseas waste recovery markets."

Gavin Cummings and Paul MacCannah from the Nottingham office of Browne Jacobson also advised Oakwood.

Lead adviser to DCC was the Leeds office of Pinsent Mason.