A FIRM near Selby which specialises in recycling tyres and safely getting rid of toxic materials from cars, has been snapped up by a new Yorkshire-based private venture capital fund for an undisclosed seven-figure sum.

A majority holding of Credential Environmental Ltd, which has four outposts in England, including a tyre recycling plant on ten acres at Bubwith aerodrome, has been acquired by Ailsa3, the fund launched last year by entrepreneurs Andy Hinton and Nick Wyatt.

The duo's stake in the £35 million sale of Leeds-based White Rose Environmental in June 2004, was used to launch Ailsa3 as a vehicle to fund and acquire businesses in the buoyant environmental sector where they have extensive experience.

The £16 million turnover Credential Environmental Ltd, is the first of what the two men hope will be a portfolio of environmental companies, with another acquisition planned in Yorkshire within the next three months.

The takeovers are timed to take advantage of changes to waste disposal legislation and ever-tougher environmental directives, including the Landfill Directive and End Of Life Vehicle Directive.

Credential Environmental Ltd is expert in the collection and recycling of used tyres, as well as the management of specialist automotive waste such as brake and battery fluids, oils and catalytic converters and the treatment and transfer of other special and hazardous waste.

Last year the firm perfected a method of "shredding" used tyres into fragments that can be used as drainage for landfill sites, replacing thousands of tonnes of rock aggregate and preventing a scarring of the landscape through quarrying. Mr Hinton said: "The management has grown Credential into a very solid specialist business, and we were very pleased to be approached to help build the company further.

"We intend to grow the company into its existing and new markets, and use the specialist skills and technology to complement the next acquisitions that will form the wider waste management services group."

Credential Environmental employs more than 100 staff across its four sites at at Hinckley, London and Durham, with Bubwith accounting for 12 jobs.

The deal, which was structured by DLA Piper Rudnick Gray Cary, sees Ailsa3 take 76 per cent of the equity in Credential Environmental Ltd, with management retaining the balance.

Both Mr Hinton and Mr Wyatt will become non-executive board directors supporting managing director Mike Jordan and his team.

Updated: 09:40 Wednesday, March 16, 2005