Cleanaway Waste Management Ltd (ASX: CWY) is trading flat today at $1.49, as preparations for the takeover of industry peer Tox Free Solutions Limited (ASX: TOX) continue.
Toxfree announced a meeting of shareholders on April 6 to vote on a scheme of arrangement under which Cleanaway will acquire 100% of Toxfree's capital.
The acquisition target operates nationwide in waste collection and recycling, industrial cleaning, and hazardous and medical waste treatment, and delivered $40 million underlying EBITDA in the first half of FY 2018 – a sizeable figure, compared to the $160 million EBITDA reported by Cleanaway over the same period.
Toxfree's Board of Directors recommended voting in favour of the acquisition, which is subject to court and regulatory approval. The scheme provides for a $3.425 per share cash payment, which prices Toxfree at $670 million. Shares in Toxfree currently trade at $3.44.
The acquisition would become effective in the second quarter of 2018, but according to Cleanaway the integration between the two businesses could take two years and cost about $35 million. Cleanaway expects $35 million annual synergy benefits to come into full effect by FY 2021.
