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Bullboard - Stock Discussion Forum NEWALTA CORPORATION T.NAL

"Newalta Corp provides engineered environmental solutions that enable customers to reduce disposal, enhance recycling and recover valuable resources from oil and gas exploration and production waste streams."

TSX:NAL - Post Discussion

NEWALTA CORPORATION > National Bank pegs merger value at $1.60
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Post by sculpin2 on Mar 01, 2018 9:22am

National Bank pegs merger value at $1.60

Newalta (NAL; SP; $1.45T) is getting recapitalized and it looks far better than it could have been in a debt restructuring outcome.  Tervita is essentially RTO-ing through NAL, with the pro-forma entity being run by Tervita management, the board 80% Tervita, and the ownership 89% Tervita / 11% NAL. This is a first take, analyst Greg Colman should be out with a report. More to follow.
 
  • Using Secure-like growth rates and multiples (which may be a stretch, but it’s a starting point), this suggests a pro-forma market cap of something like $1.3 bln, and so NAL’s 11% stake is worth about $143mm or $1.63/sh (currently $0.95/sh).  Second, the balance sheet looks a lot better - the pro-forma entity will be more like 3.0x (vs. NAL at ~5x) using management’s numbers and a Secure-like growth rate, and with actual free cash flow, probably around $100mm;
 
  • This may look a little daunting to be diluted down to only 11% of the pro-forma entity, but when you’re coming off a highly levered base, with a market cap of $84mm, this is actually a bit of a win for NAL shareholders.  Versus other recapitalizations we’ve seen in the basin which involve highly dilutive financings (and no growth).
Comment by TMAZZ on Mar 01, 2018 9:30am
that's a 50% uptick according to the article, I will take my chances and buy some here thanks Newalta
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