Waste Connections, Inc. (WCN: Quote) agreed Monday to acquire R360 Environmental Solutions, Inc. for about $1.3 billion in an all-cash deal. R360 is a provider of non-hazardous oilfield waste services. The deal, subject to regulatory approvals, is expected to occur in the fourth quarter of 2012.
"We are extremely pleased about the opportunity to bring R360 into the Waste Connections family. Through acquisitions and new facility development, R360 has created leading positions in key basins, providing closed loop oilfield waste services within an increasingly stringent regulatory environment," Waste Connections Chairman and CEO Ronald Mittelstaedt said in a statement.
For Waste Connections, the acquisition of R360 represents a natural extension of its existing exploration and production disposal activities.
R360's has a higher margin disposal-oriented profile and generates annualized revenue of about $300 million.
Following the closure of the deal, Woodlands, Texas-based Waste Connections expects the deal to be more than 400 basis points accretive to consolidated EBITDA margin. Further, the deal will be accretive to free cash flow margins.
R360 is a leading provider of non-hazardous oilfield waste treatment, recovery and disposal services in several of the most active natural resource producing areas in the U.S., including the oil-rich Permian, Bakken and Eagle Ford Basins.
R360 was established in July 2010 after combining the companies of U.S. Liquids of Louisiana (USLL), Controlled Recovery, Inc. (CRI), Calpet, R&G and J.Scott.
Waste Connections provides solid waste collection, transfer, disposal, and recycling services in mostly exclusive and secondary markets, with operations in 30 states.
As the nation's leading environmental oilfield waste management provider, R360 has the resources to offer superior reliability and results to customers across the country.
"While a tepid economy has impacted MSW volumes, increased drilling activity in unconventional areas is fueling impressive organic growth within the E&P waste sector. R360 is actively permitting several new sites to further expand its operations in this growing industry," Mittelstaedt added.
WCN closed Friday's regular trading session at $29.67, up $0.12 on a volume of 0.87 million shares, higher than the three-month average volume of 0.63 million shares. In the past 52-week period, the stock has been trading in a range of $28.70 to $35.95.
by RTT Staff Writer
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