Cleanaway Waste Management Announces Acquisition of Tox Free Solutions and Equity Raising

Cleanaway Waste Management Limited (“Cleanaway”, ASX:CWY) today entered into a Scheme Implementation Deed under which it agreed to acquire 100% of the shares on issue in Toxfree Solutions Limited (“Toxfree”, ASX:TOX) by way of a scheme of arrangement (the “Scheme” or the “Acquisition”) unanimously recommended by Toxfree’s Board of Directors.

The Acquisition will be made via a 100% cash offer of $3.425 per share, which represents a 27.5% premium to Toxfree’s 10-day VWAP, a 28.0% premium to Toxfree’s 1 month VWAP and a 34.7% premium to Toxfree’s VWAP since the FY17 result,  and an acquisition multiple of 7.1x Toxfree’s FY17 EBITDA (post realisation of anticipated annual synergies) or 10.0x FY17 EBITDA on a pre synergies basis. Cleanaway will also permit Toxfree to pay a special dividend to Toxfree shareholders with a corresponding reduction in the Acquisition Price for the cash amount of any special dividend. Cleanaway and Toxfree will provide an update on the expected quantum of the special dividend at a later point.

In addition, Cleanaway will allow an interim dividend of up to 5 cents per Toxfree share for the six months ended 31 December 2017 following declaration by the Toxfree Board of Directors in the ordinary course without adjustment to the Acquisition Price of $3.425 per share.

The acquisition is expected to complete in 2Q CY2018 and is subject to customary completion conditions including Toxfree shareholder approval, court approval, the independent expert concluding the scheme is in the best interests of Toxfree shareholders, no material adverse change, successful completion of institutional component of the Entitlement Offer, ACCC approval, no prescribed occurrence and no material breach of the representations and warranties. The Scheme Implementation Deed is otherwise on customary terms and conditions including in relation to implementation of the scheme, exclusivity and mutual break fees. The full terms of the scheme implementation deed have separately been released to the ASX and the market.

The Toxfree Board of Directors unanimously recommends that Toxfree shareholders vote in favour of the Scheme, and intend to vote the shares they own or control in favour of the Scheme, in the absence of a superior proposal.


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