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Wednesday 9th of February 2022 05:53:39 AM

Republic Services confirms deal to buy US Ecology for $48/share

Biohazard waist Radule Perisic/E+ via Getty Images Republic Services (NYSE:RSG) confirmed it agreed to buy US Ecology (NASDAQ:ECOL) for $48/share in cash, or a total value of about $2.2B, including debt. US Ecology jumped 28% in premarket trading before the shares were halted. RSG fell 1%. The deal represents a 70% premium to US Ecology's closing share price on Tuesday. Republic expects about $40M in cost synergies within three years following the acquisition, expected to result in double-digit returns, according to a statement. The combined company adjusted free cash flow conversion is expected to be at least 47% by 2024. The deal is expected to close by the end of Q2, including getting regulatory approvals and approval of US Ecology holders. The deal is not subject to a financing condition and Republic (RSG) expects to finance the acquisition using existing and new sources of debt. The company plans net debt-to-EBITDA, as defined in its credit agreement, to return back below 3x within 18 months of the deal close. US Ecology provides environmental services to commercial and government entities. The company competes with larger waste management companies including Waste Management (NYSE:WM), Waste Connections (NYSE:WCN) and GFL Environment (NYSE:GFL). Moelis & Co. is serving as exclusive financial advisor to Republic Services and Davis Polk & Wardwell LLP is serving as Republic Services' legal counsel. Barclays PLC and Houlihan Lokey Capital, Inc. are serving as co-financial advisors to US Ecology. Dechert LLP is serving as US Ecology's legal counsel. Bloomberg first reported about the potential deal on Tuesday night.
ECOL RSG WM WCN GFL

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