AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 129.00 Decreased By ▼ -0.53 (-0.41%)
BOP 6.76 Increased By ▲ 0.08 (1.2%)
CNERGY 4.50 Decreased By ▼ -0.13 (-2.81%)
DCL 8.70 Decreased By ▼ -0.24 (-2.68%)
DFML 41.00 Decreased By ▼ -0.69 (-1.66%)
DGKC 81.30 Decreased By ▼ -2.47 (-2.95%)
FCCL 32.68 Decreased By ▼ -0.09 (-0.27%)
FFBL 74.25 Decreased By ▼ -1.22 (-1.62%)
FFL 11.75 Increased By ▲ 0.28 (2.44%)
HUBC 110.03 Decreased By ▼ -0.52 (-0.47%)
HUMNL 13.80 Decreased By ▼ -0.76 (-5.22%)
KEL 5.29 Decreased By ▼ -0.10 (-1.86%)
KOSM 7.63 Decreased By ▼ -0.77 (-9.17%)
MLCF 38.35 Decreased By ▼ -1.44 (-3.62%)
NBP 63.70 Increased By ▲ 3.41 (5.66%)
OGDC 194.88 Decreased By ▼ -4.78 (-2.39%)
PAEL 25.75 Decreased By ▼ -0.90 (-3.38%)
PIBTL 7.37 Decreased By ▼ -0.29 (-3.79%)
PPL 155.74 Decreased By ▼ -2.18 (-1.38%)
PRL 25.70 Decreased By ▼ -1.03 (-3.85%)
PTC 17.56 Decreased By ▼ -0.90 (-4.88%)
SEARL 78.71 Decreased By ▼ -3.73 (-4.52%)
TELE 7.88 Decreased By ▼ -0.43 (-5.17%)
TOMCL 33.61 Decreased By ▼ -0.90 (-2.61%)
TPLP 8.41 Decreased By ▼ -0.65 (-7.17%)
TREET 16.26 Decreased By ▼ -1.21 (-6.93%)
TRG 58.60 Decreased By ▼ -2.72 (-4.44%)
UNITY 27.51 Increased By ▲ 0.08 (0.29%)
WTL 1.41 Increased By ▲ 0.03 (2.17%)
BR100 10,450 Increased By 43.4 (0.42%)
BR30 31,209 Decreased By -504.2 (-1.59%)
KSE100 97,798 Increased By 469.8 (0.48%)
KSE30 30,481 Increased By 288.3 (0.95%)

US-based Waste Connections Inc is buying Canada's Progressive Waste Solutions Ltd for about $2.67 billion in a deal that will make the combination the third-biggest waste management services provider in North America. The all-stock deal, structured as a reverse merger, will allow Waste Connections to move its tax domicile to Canada with its shareholders owning about 70 pct of the combined company.
The transaction is the latest in a string of deals where US companies have acquired foreign companies through reverse mergers to avoid higher tax rates at home. The $24.55 per share offer represents a premium of 4.4 percent to the last closing price of Progressive Waste's US-listed stock.
Waste Connections's shares were up 7 pct at $54.48 in early trading on Tuesday, while Progressive Waste's US-listed stock rose 8.3 percent to $25.52. With proforma revenue of about $4.1 billion, the combination will command a market share of about 7 percent, Barclays analyst Jon Windham wrote in a note to clients. The combined company and its larger rivals - Waste Management Inc and Republic Services Inc - will corner nearly half of the market share of the North American waste disposal market, the analyst said.
Windham, however, said he did not expect "significant regulatory hurdles" to the deal. Waste Connections, which has operations only in the United States, has few overlapping markets with Canada's Progressive Waste. The Canadian company gets about 63 percent of its annual revenue from the United States and the rest from Canada.
The combined company will be led by Waste Connections's current management team. The deal will result in more than $625 million of adjusted free-cash flow generation for the combined company in the first year from tax-effected synergies, capital expenditure discipline and other cash flow benefits. Progressive Waste, whose US shares have fallen 20 percent in the past 12 months, had put itself up for sale earlier this month.
Waste Connections also said it expects to report revenue of $531.9 million and adjusted profit of 48 cents per share for the fourth quarter ended December 31. Analysts on average had expected fourth-quarter earnings of 47 cents per share on revenue $521 million, according to Thomson Reuters I/B/E/S.

Copyright Reuters, 2016

Comments

Comments are closed.