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Highlights
- The Boise, Idaho-based US Ecology provides recycling and disposal services for various waste.
- The Ecology acquisition will enable Republic to expand its operations while ensuring “customer demand for a single-source partner”, the companies said in a joint statement.
- The companies expect to close the deal by the end of the second quarter, subject to regulatory clearances and approval by Ecology shareholders.
Shares of US Ecology, Inc (ECOL) surged more than 68% after Republic Services, Inc (RSG) offered to purchase the waste disposal company for about US$1.5 billion or US$48 per share.
The ECOL stock was trading at US$47.4, up 68.34% at 2:58 pm ET after the news.
Republic has entered into a definitive agreement with US Ecology for the takeover. Republic Inc. (RSG), also a waste disposal company, has agreed to pay US$48 per share to US Ecology (ECOL).
The acquisition will enable Republic to expand its operations while ensuring “customer demand for a single source partner”, the companies said in a joint statement.
Including debt, the deal value comes to US$2.2 billion.
The Boise, Idaho-based US Ecology provides recycling and disposal services for various waste.
Commenting on the merger, the companies said in the statement that it will create "a national platform of difficult-to-replicate assets”, enabling Republic to serve customers better.
Republic will gain access to nine specialty-waste landfills, 16 federal-registered waste treatment plants, storage, and disposal facilities, seven wastewater-treatment facilities, and over 80 field locations.
Republic expects the deal to generate US$40 million in cost synergies within three years.
The Phoenix, Arizona-based Republic plans to finance the deal using current and new sources of debt.
The boards of both the companies have approved the terms.
The companies expect to close the deal by the end of the second quarter, subject to regulatory clearances and approval by Ecology shareholders.
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Source: Pixabay
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US Ecology’s third-quarter results
In the third quarter of 2021, US Ecology’s total revenue rose by 8% YoY to US$257.2 million, while the net income was US$6.7 million, or earnings per diluted share of US$0.21.
The company’s adjusted EBITDA was US$45.4 million, and the adjusted free cash flow was US$14.9 million.
Revenue from its waste solutions segment increased by 7% to US$115.2 million compared with US$107.2 million in the same period of 2020. The increase was driven by an 11% boost in Base Business and a 25% jump in transportation revenue year-over-year.
The company lowered its earnings outlook for the full year on slow industrial production. But it said its operations across segments were positive. The company faced transportation and labor challenges in the quarter.
