- Waste Connections will acquire 30 energy waste treatment and disposal facilities from Secure Energy Services for an estimated $1.075 billion (Canadian). The deal is expected to close in the first quarter of 2024, subject to closing conditions and the approval of the Canadian Competition Bureau, the companies said.
- The deal is part of a mandated divestiture agreement stemming from Secure’s 2021 merger with Tervita Corp. It includes 18 treatment, recovery and disposal facilities; six landfills; four saltwater disposal injection wells and two disposal caverns.
- The oil and gas exploration and production waste treatment facilities are located in “key geographic Canadian oil and gas basins” and represent a combined annual revenue of about $300 million (Canadian), according to Waste Connections.
The deal represents not only Waste Connections’ further expansion in Canada, but also its overall expansion in E&P services. CEO Ron Mittelstaedt said in a statement that Secure’s E&P waste treatment and disposal facilities are in ideal locations that offer “significant internal capacity for growth” and the facilities have “a heavy orientation towards serving customers engaged in energy production activity.”
Secure’s locations will also complement Waste Connections’ R360 Environmental Solutions operations, a U.S. oilfield waste management provider it acquired in 2012. Waste Connections has about 30 E&P waste treatment and disposal facilities in the U.S., including landfills and injection wells.
The facilities in the transaction are all part of a divestiture process mandated by Canada’s Competition Tribunal. Secure was required to sell 29 of its facilities to “resolve ongoing harm to competition in Western Canada,” according to the Competition Bureau. Before their merger, Secure and Tervita were fierce competitors who were the two largest suppliers, “and in many areas, the only suppliers of oil and gas waste services” in that particular area of the country, the bureau said. This would have affected customers in 136 markets, the tribunal said. Secure unsuccessfully appealed the decision.
Tervita once had E&P operations in the United States until it sold those assets to Republic Services in 2014.
Waste Connections brought in $59 million in the third quarter from E&P activity, CFO Mary Anne Whitney reported during the company’s Oct. 26 earnings call. Overall earnings from E&P services were up 10% year over year, she said.