CALGARY – Shares in Newalta Corp. (TSX:NAL) soared almost seven per cent Wednesday after the company announced an agreement to sell its industrial division for $300 million in cash to a Toronto-based private equity firm.
The division employs 950 people in more than 35 locations across Canada that handle various types of industrial waste.
Among other things, it operates a Montreal-area lead-acid battery recycling facility, a solid waste landfill near Hamilton, Ont., and a used-oil recycling facility in North Vancouver.
Besides making the cash payment to Newalta, Birch Hill Equity Partners will assume the division’s asset retirement obligation.
Newalta says it will use money from the sale to reduce debt and fund growth in its remaining business areas, which include oilfield services and new markets.
Birch Hill manages $2 billion in assets with 20 partner companies that collectively employ more than 30,000 people and generate more than $5 billion in total revenue.
The transaction is expected to close in the first quarter of 2015, subject to satisfaction of closing conditions and regulatory approvals.
On the Toronto Stock Exchange, Newalta shares rose $1.12 or 6.74 per cent to close at $17.73.