US Ecology (NASDAQ: ECOL) operates as a waste management and environmental services company, which operates across the globe. Shares of the waste management company are soaring 69% through early trading on Wednesday, February 9, 2022. Over the past three months, US Ecology has seen average daily volume of 177,060 shares. However, volume of 6.55 million shares or dollar volume of around $310.67 million, has already exchanged hands through early trading Wednesday.
Shares of US Ecology are soaring after the company announced it has entered into a definitive agreement to be acquired by Republic Services, Inc. (NYSE: RSG). Under the terms of the deal, Republic Services will acquire all outstanding shares of US Ecology at a price-per-share of $48 in cash. This gives the deal an approximate value of $2.2 billion including debt.
Republic’s acquisition of US Ecology will add to its existing national platform through vertical integration. As a result, the newly-combined company will add nine specialty waste landfills with five hazardous waste landfills, 16 RCRA permitted TSDFs, seven wastewater treatment facilities, and an addition of over 80 environmental services filed locations. As a result of bolstering its vertical integration of waste management services, Republic seeks to be a “single-source partner for customers,” across all forms of waste and recycling needs.
The US Ecology acquisition is estimated to generate strong cost synergies with Republic. Over the first three years, management sees the potential of cost synergies to total up $40 million. Furthermore, the combined entity’s adjusted free cash flow conversion is estimated to be at least 47% by 2024.
“We are pleased to have reached this agreement with Republic Services, an established leader in the industry, recognized for its commitment to safety, sustainability and superior customer service,” said Jeff Feeler, chairman, chief executive officer and president at US Ecology. “2022 marks US Ecology’s 70th year of operations, built around providing environmental solutions that protect human health and the environment. The combination of our companies provides a platform to accelerate our common strategy of providing a full complement of environmental solutions to better our world. In addition, this transaction showcases the value of US Ecology’s business, providing our stockholders with attractive and certain value, and brings together a network of assets with extensive environmental solutions expertise to handle customers’ most challenging and complex needs. I would like to thank US Ecology’s employees for their hard work and dedication to this mission. We look forward to working with the Republic Services team to complete the transaction and deliver premium products and services.”
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