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Cleanaway Waste Management (ASX:CWY) has acquired Victorian-based Contract Resources Group for $377 million in a step that forms an important part of the company’s development plan, “Blueprint 2030.”
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Contract Resources provides specialist catalyst handling, chemical cleaning, decontamination, and similar services in Victoria.
Its relationship with customers in the oil and gas sector is particularly attractive to Cleanaway – according to the latter’s managing director and CEO Mark Schubert – as it seeks to expand its business scope.
“Contract Resources is a natural fit with Cleanaway, given its market leadership, deep sector expertise, and stable recurring earnings stream,” he said.
“Its long-standing relationships with tier-one oil and gas customers and attractive growth outlook is strongly aligned with our strategic vision… at Cleanaway.
“Its integration will reposition our IWS business, enhancing its scale, and unlocking new opportunities, including cross-selling our total waste management solutions into Contract Resources’ well-established customer network.”
Contracts’ strong relationships were also a crucial attraction; reflected in the fact its top 10 clients had been doing business with Contract for an average of 16 years.
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The deal is now expected to deliver approximately $12 million in annual net cost synergies when combined with Cleanaway’s Industrial Waste Services.
Cleanaway was marked to trade at $2.55 after the opening bell today.
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