Newalta shareholders will receive 0.1467 of one NewTervita common share
Newalta Corporation, a private Alberta-based, energy-focused waste and environmental services company, announced it has entered into an agreement to merge with Tervita, creating a new company called “New Tervita”, according to a press release.
This will create a large publicly traded environmental solutions provider in Canada providing waste processing, treating, recycling and disposal services to customers in the oil and gas, mining and industrial sectors.
New Tervita is expected to have a market capitalization that ranks it among Canada’s largest publicly traded energy services and environmental companies,” said John Barkhouse, president and CEO of Newalta.
“We are pleased to announce this milestone transaction, which offers our shareholders a meaningful ownership position in a significantly larger entity that is the premier Canadian energy environmental solutions provider.
“This transaction significantly improves our balance sheet, and the synergies and growth opportunities provide significant potential value creation for Newalta shareholders. We strongly believe that this combination is the most attractive path forward for Newalta, and we are committed to making the merger and ensuing integration a success.”
New Tervita is expected to have pro forma 2017 revenue of approximately $2.6 billion over 115 operating locations, approximately 2,000 employees and approximately 1,000 customers.
Newalta shareholders will receive 0.1467 of one common share of New Tervita for each common share of Newalta; and 0.0307 of one warrant to purchase one New Tervita Share for each Newalta Share.
Each New Tervita Warrant will be exercisable for a period of two years from the closing of the arrangement at a price of $2.75 per equivalent Newalta Share.
Holders of Tervita common and preferred shares will receive one New Tervita Share for each Tervita Share held.
The arrangement for Canadian shareholders of both entities qualify as a tax-free (or tax-deferred) and a reorganization for U.S. shareholders.
New Tervita expects approximately $40-$45 million in annual synergies within two years, creating value and efficiency for customers and other stakeholders. It is anticipated there will be one-time costs of $15-$20 million in order to achieve the ongoing annual synergies
“Each of our companies are industry leaders with a robust portfolio of attractive growth projects. We are excited to combine with Newalta’s high-quality assets and talented personnel, and we will continue to set the standard for service quality benefiting customers, employees and stakeholders,”said John Cooper, Tervita’s CEO.
New Tervita will be led by the existing senior executive team of Tervita comprised of John Cooper as President and Chief Executive Officer, Brad Dlouhy as Chief Operating Officer and Rob Dawson as Chief Financial Officer.