Cleanaway shares jump on Contract Resources buyout
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More news: Cleanaway was the best performing ASX 200 stock in early trade after the waste management company announced the $377 million acquisition of industrial services provider Contract Resources Group.
Cleanaway shares were up 5.1% to $2.68 at 10:35am AEDT.
Cleanaway to buy Contract Resources for $377m in debt-funded deal
The news: Waste management company Cleanaway has agreed to buy industrial services provider Contract Resources Group for $377 million.
The numbers: Cleanaway said the acquisition is expected to generate around $12 million in annual net cost synergies, when combined with its own industrial waste services business.
It is forecast to deliver "high-single digit" earnings per share accretion in the first 12 months of ownership and double-digit internal rate of return, pre- and post-synergies.
The context: Contract Resources is a provider of catalyst handling, decontamination, chemical cleaning and other related services. Cleanaway managing director and CEO Mark Schubert said that Contract Resources is "embedded in every major LNG and refinery site across Australia", as well as servicing eight of the 10 largest LNG sites in the Middle East.
The transaction, which will be fully debt funded, is expected to be completed by late 2025, subject to regulatory approval.
The source: ASX
