The directors of Osborne Park-based Tox Free Solutions have decided to cash-in on 17 years of successful national growth by accepting a friendly $671 million takeover offer from waste management competitor Cleanaway.
Under a scheme of arrangement, Cleanaway will buy Tox Free shares at $3.43 with Tox Free shareholders also entitled to an interim dividend of 5 cents per share.
Tox Free shares were trading at $2.84 to start the day but have jumped 20 per cent to $3.40 at 1pm AEDT.
The company also said it expected to pay a fully-franked special dividend on or shortly before the takeover; however, the scheme of arrangement will be reduced by the amount of that dividend.
Tox Free chairman Robert McKinnon said the company’s directors supported the takeover deal.
“The Tox Free board has unanimously concluded that the proposal from Cleanaway represents a compelling offer for Toxfree shareholders,” he said
“The scheme consideration of $3.425 per share plus the FY2018 interim dividend payment of 5 cents per share reflects the strategic value of the Tox Free business to Cleanaway, as well as the potential synergies that can be realised from the combination of the two businesses.”
Tox Free has built a national presence since it was established in the year 2000, when it had just 20 staff in Kwinana and Port Hedland.
Under the leadership of 40under40 award winner Stephen Gostlow, who has been with the group since 2002 and managing director since 2005, it has expanded through acquisitions and organic growth to have 1,650 staff across Australia.
The deal is subject to approval from the Australian Competition and Consumer Commission.
Morgan Stanley and Clayton Utz are advising Tox Free.
Macquarie Capital is lead financial adviser for Cleanaway, while Gilbert + Tobin is acting as legal adviser.
Cleanaway managing director Vik Bansal said the acquisition consolidated the company’s position as Australia’s leading waste management firm.
“Tox Free complements and integrates into our operating model, enhances our business in all areas, and creates potentially significant operating leverage across all our businesses,” he said.
“The transaction is expected to deliver approximately $35 million in annual synergies and be strongly accretive for earnings per share and free cash flow per share when integration is complete.”
By Tayler Neale
