Republic Services Agrees To Acquire US Ecology At 70% Premium

  • Republic Services, Inc. RSG has agreed to acquire US Ecology Inc ECOL for $48 per share in cash, representing a total value of ~$2.2 billion, including net debt of ~$0.7 billion.
  • The acquisition price represents a premium of 70% to US Ecology's closing price of $28.17 on February 8, 2022.
  • US Ecology is a provider of environmental services to commercial and government entities, with trailing twelve-month revenue as of September 30, 2021, of $968 million and adjusted EBITDA of $156 million.
  • Republic Services expects the transaction to be immediately accretive to adjusted earnings and free cash flow; anticipates ~$40 million in cost synergies within three years following the acquisition, expected to result in double-digit returns.
  • Republic intends to finance the transaction using existing and new sources of debt.
  • The acquisition will allow Republic to provide customers a comprehensive set of environmental services, including recycling, solid waste, special waste, hazardous waste, container rental, and field services.
  • Republic Services held cash and cash equivalent of $122.9 million as of September 30, 2021.
  • The transaction is expected to close by the end of the second quarter.
  • "This strategic acquisition expands our geographic footprint across the U.S. and Canada and provides vertical integration capabilities for our environmental solutions business," said Republic Services CEO Jon Vander Ark.
  • Price Action: RSG shares are trading higher by 0.81% at $127.99 and ECOL higher by 68.7% at $47.52 on the last check Wednesday.

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