March 2, 2018
Newalta Corporation and Tervita Corporation, a private Alberta-based energy-focused waste and environmental services company have combined their businesses to create an energy-focused environmental solutions provider in Canada, providing waste processing, treating, recycling and disposal services to customers in the oil and gas, mining and industrial sectors.
“We are pleased to announce this milestone transaction, which offers our shareholders a meaningful ownership position in a significantly larger entity that is the premier Canadian energy environmental solutions provider,” said John Barkhouse, President and Chief Executive Officer of Newalta. “Newalta shareholders will have the opportunity to participate and benefit in the success and growth of the combined businesses. Additionally, this transaction significantly improves our balance sheet, and the synergies and growth opportunities provide significant potential value creation for Newalta shareholders. We strongly believe that this combination is the most attractive path forward for Newalta, and we are committed to making the merger and ensuing integration a success.”
The transaction, which will result in the merger of Newalta and Tervita under the name Tervita Corporation (New Tervita), is expected to provide significant scale, resources and future growth opportunities.
The combination will be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) whereby Newalta shareholders will be entitled to receive: (i) 0.1467 of one common share of New Tervita for each common share of Newalta; and (ii) 0.0307 of one warrant to purchase one New Tervita Share for each Newalta Share. Each New Tervita Warrant will be exercisable for a period of two years from the closing of the Arrangement at a price of $2.75 per equivalent Newalta Share.
Holders of Tervita common shares and Tervita preferred shares and together with the Tervita Common Shares, will receive one New Tervita Share for each Tervita Share held. Upon completion of the Arrangement, Newalta shareholders will own approximately 11 per cent of the New Tervita Shares to be outstanding (or approximately 13 per cent of the New Tervita Shares if all of the New Tervita Warrants are exercised).
The Arrangement is intended to be tax-deferred for Canadian tax purposes for shareholders of both entities and to qualify as a tax-free (or tax-deferred) reorganization for U.S. shareholders.
“Each of our companies are industry leaders with a robust portfolio of attractive growth projects.” said John Cooper, Tervita’s Chief Executive Officer. “We are excited to combine with Newalta’s high-quality assets and talented personnel, and we will continue to set the standard for service quality benefiting customers, employees and stakeholders. This combination also represents an excellent opportunity for Tervita to become a publicly traded company, and we look forward to building value for shareholders in a measured and disciplined manner in the years to come.”
New Tervita will be led by the existing senior executive team of Tervita comprised of John Cooper as President and Chief Executive Officer, Brad Dlouhy as Chief Operating Officer and Rob Dawson as Chief Financial Officer.