In a bid to expand its oilfield waste management services, Waste Connections (NYSE:WCN) on Monday said it bought R360 Environmental Solutions for $1.3 billion in cash.
Slow economic growth has impacted Municipal Solid Waste volumes, however increased drilling activity in unconventional areas has fueled organic growth within the E&P waste sector.
R360 provides non-hazardous oilfield waste treatment, recovery and disposal services in some of the most active basins, including the oil-rich Bakken and Eagle Ford basins. It operates 26 facilities in the Midwest and raked in some $300 million last year in revenue.
"Through acquisitions and new facility development, R360 has created leading positions in key basins, providing closed loop oilfield waste services within an increasingly stringent regulatory environment," Waste Connections CEO Ronald Mittelstaedt said in a statement.
The deal, subject to customary closing conditions and regulatory approvals, is expected to close in the fourth quarter of 2012.
Waste Connections said the acquisition will be more than 400 points accretive to its consolidated EBITDA margin and also benefit free cash flow margins.
Shares of Waste Connections soared 6.8% Monday morning to around $31.70.