CDN NEWS | 
US NEWS 
CALGARY — Shares in Secure Energy Services Inc. were trading higher after it announced an all-stock deal to buy oilfield waste disposal rival Tervita Corp., the latest in a string of consolidation transactions in the oilpatch.
Secure is offering 1.2757 common shares for each Tervita share in the friendly deal between the Calgary-based companies which values Tervita at $478 million at Secure’s Monday closing price of $3.24.
Secure’s shares rose by as much as 15.7 per cent on Tuesday morning to $3.75, however, while Tervita’s shares fell by as much as 7.3 per cent to $4.29.
In a joint news release, the companies say the merger will result in a stronger midstream and environmental solutions business that will have total enterprise value of about $2.3 billion.
They say it is expected to provide improved free cash flow from greater scale and annual integration cost savings of about $75 million within 12 to 18 months.
Upon completion, existing Secure shareholders will own about 52 per cent of the company.
“We believe the combination has significant strategic benefits from both companies, but the key item to watch for will be Competition Bureau approval given the significant ownership of third-party disposal facilities,” said analyst Cole Pereira of Stiefel First Energy in a report.
Boards of both companies unanimously support the transaction, but it will also require a majority vote by shareholders, as well as regulatory and court approvals, the companies said.
This report by The Canadian Press was first published March 9, 2021.
Companies in this story: (TSX:TEV, TSX:SES)
The Canadian Press
Share This:
