Latest news with #synergies
Yahoo
17-05-2025
- Business
- Yahoo
Strathcona Resources Ltd (STHRF) Q1 2025 Earnings Call Highlights: Strategic Moves and Growth ...
Release Date: May 16, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Strathcona Resources Ltd (STHRF) has reached definitive agreements to sell substantially all of its Montney business, which is expected to streamline operations and focus on core assets. The company disclosed an investment in MEG Energy and plans to make an offer for the remaining shares, indicating a strategic move to consolidate and expand its oil sands operations. Strathcona Resources Ltd (STHRF) is positioned to become the fifth largest oil producer in Canada, with a focus on long-life, low-decline, high free cash flow oil assets. The proposed acquisition is expected to generate $175 million in annual synergies, including savings from overhead, interest, and operational efficiencies. The acquisition of the largest crude-by-rail terminal in Western Canada provides a strategic hedge against pipeline capacity constraints, potentially enhancing cash flow stability. The company's strategic shift away from natural gas and the Montney business may limit diversification and expose it to oil market volatility. The proposed acquisition of MEG Energy involves complexities, including the need for regulatory approvals and integration challenges. Strathcona Resources Ltd (STHRF) is a comparatively new company with limited trading history, which may affect investor confidence and valuation. The reliance on synergies and operational efficiencies to achieve accretion may not materialize as expected, posing a risk to projected financial benefits. The acquisition strategy involves leveraging, which could increase financial risk if market conditions or interest rates change unfavorably. Warning! GuruFocus has detected 7 Warning Sign with BRC. Q: Can you provide more detail on the strategic rationale behind moving away from the Montney business and focusing on thermal and oil sands? A: Adam Waterous, Managing Partner & CEO, explained that Strathcona remains optimistic about long-term oil demand and skeptical about long-term oil supply, particularly from the US. The decision to sell the Montney business aligns with their focus on long-life, low-decline, high free cash flow oil assets. The acquisition of MEG Energy is seen as highly complementary, offering operational synergies and positioning Strathcona as a significant player in North America without mines or refineries. Q: Could you elaborate on the rail terminal acquisition and its strategic importance? A: Connor Waterous, CFO, stated that acquiring the largest crude-by-rail terminal in Western Canada is part of their strategy to manage risk, particularly the WCS differential. The terminal provides cash flows that are inversely correlated with their upstream business, offering a hedge against pipeline constraints and potential widening differentials. Q: How does the MEG Energy acquisition create value for both companies? A: Adam Waterous highlighted that the acquisition is unusual because both companies gain accretion on various metrics. Strathcona benefits from operational synergies and a strategic fit, while MEG shareholders receive a premium and per-share accretion. The combined entity will have significant cash flow synergies and operational efficiencies. Q: What are the expected synergies from the MEG Energy acquisition? A: The combined business anticipates $175 million in annual synergies, including $50 million from overhead reductions, interest savings due to improved credit ratings, and $75 million from operational efficiencies. These synergies are expected to enhance cash flow and operational performance. Q: How does Strathcona plan to leverage its position as a major oil producer in Canada? A: Adam Waterous emphasized that Strathcona aims to be a leading investment-grade oil company with long-life, low-decline assets. The acquisition positions them as the fifth-largest oil producer in Canada, with a focus on maintaining a strong reserve life index and capitalizing on operational synergies. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
15-05-2025
- Business
- Reuters
Brazil food companies Marfrig and BRF to merge, says source
SAO PAULO, May 15 (Reuters) - Brazilian food companies Marfrig ( opens new tab and BRF ( opens new tab are expected to announce a merger involving a share swap this evening, a source briefed on the matter told Reuters on condition of anonymity because the deal has not been made public yet. The companies are eyeing annual synergies over 800 million real ($140.80 million) from their tie-up. The name of the new company created by Marfrig and BRF will be MBRF, the person said. ($1 = 5.6817 reais)
Associated Press
07-05-2025
- Business
- Associated Press
RXO Announces First-Quarter Results, Successful Migration of Coyote Coverage Operations to the RXO Connect® Platform
PRESS RELEASE: Paid Content from Business Wire. The AP news staff was not involved in its creation. Published [hour]:[minute] [AMPM] [timezone], [monthFull] [day], [year] CHARLOTTE, N.C.--(BUSINESS WIRE)--May 7, 2025-- RXO (NYSE: RXO) today reported its first-quarter financial results and announced the successful migration of Coyote coverage operations to the RXO Connect ® platform. 'Our technology team has been working diligently to integrate the best features of the legacy Coyote technology platform into RXO Connect. Today, I'm pleased to announce a critical integration milestone – carrier and coverage operations are now happening in one system, which will enable us to leverage our scale and realize future cost-of-purchased-transportation synergies,' said Drew Wilkerson, chief executive officer of RXO. 'We have made significant progress with the integration of Coyote and are again raising our synergy estimate. We now expect cash synergies to be more than $70 million. This estimate does not include cost-of-purchased-transportation opportunities, which we expect will be significant.' Wilkerson said, 'In the first quarter, RXO grew less-than-truckload brokerage volume by 26% year-over-year and saw continued momentum within Last Mile, which achieved stop growth of 24% year-over-year. RXO is well positioned for the long term because of our larger scale, exceptional service, comprehensive solutions, industry-leading innovation and deep customer relationships.' Companywide Results RXO's revenue was $1.4 billion for the first quarter, compared to $913 million in the first quarter of 2024. Gross margin was 16.0%, compared to 17.4% in the first quarter of 2024. The company reported a first-quarter 2025 GAAP net loss of $31 million, compared to a net loss of $15 million in the first quarter of 2024. The first-quarter 2025 GAAP net loss included $20 million in transaction, integration, restructuring and other costs. Adjusted net loss in the quarter was $5 million, compared to an adjusted net loss of $4 million in the first quarter of 2024. Adjusted EBITDA was $22 million, compared to $15 million in the first quarter of 2024. Adjusted EBITDA margin was 1.5%, compared to 1.6% in the first quarter of 2024. Transaction, integration, restructuring and other costs, and amortization of intangibles, impacted GAAP earnings per share by $0.15, net of tax. For the first quarter, RXO reported a GAAP diluted loss per share of $0.18. Adjusted diluted loss per share was $0.03. Brokerage Volume in RXO's Brokerage business, including the impact of the Coyote Logistics acquisition in both periods, declined by 1% year-over-year in the first quarter. Less-than-truckload volume increased by 26% but was offset by an 8% decline in full truckload volume. Brokerage gross margin was 13.3% in the first quarter. Complementary Services Managed Transportation increased the synergy loads provided to Brokerage. Last Mile stops grew by 24% year-over-year. RXO's complementary services gross margin was 21.0% for the quarter. Second-Quarter Outlook RXO expects second-quarter 2025 adjusted EBITDA to be between $30 million and $40 million. The company expects second-quarter 2025 Brokerage gross margin to be between 13% and 15%. Conference Call The company will hold a conference call and webcast on Wednesday, May 7 at 8 a.m. Eastern Daylight Time. Participants can call in toll-free (from U.S./Canada) at 1-800-549-8228; international callers dial +1-289-819-1520. The conference ID is 81237. A live webcast of the conference call will be available on the investor relations area of the company's website, . A replay of the conference call will be available through May 14, 2025, by calling toll-free (from U.S./Canada) 1-888-660-6264; international callers dial +1-289-819-1325. Use the passcode 81237#. Additionally, the call will be archived on . About RXO RXO (NYSE: RXO) is a leading provider of asset-light transportation solutions. RXO offers tech-enabled truck brokerage services together with complementary solutions including managed transportation, freight forwarding and last mile delivery. The company combines massive capacity and cutting-edge technology to move freight efficiently through supply chains across North America. The company is headquartered in Charlotte, N.C. Visit for more information and connect with RXO on Facebook , X , LinkedIn , Instagram and YouTube . Non-GAAP Financial Measures We provide reconciliations of the non-GAAP financial measures contained in this release to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this release. The non-GAAP financial measures in this release include: adjusted earnings before interest, taxes, depreciation and amortization ('adjusted EBITDA'); adjusted EBITDA margin; and adjusted net loss and adjusted diluted loss per share ('adjusted EPS'). We believe that these adjusted financial measures facilitate analysis of our ongoing business operations because they exclude items that may not reflect, or are unrelated to, RXO's core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures should only be used as supplemental measures of our operating performance. Adjusted EBITDA, adjusted EBITDA margin, adjusted net loss and adjusted EPS include adjustments for transaction and integration costs, as well as restructuring costs and other adjustments as set forth in the attached tables. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating RXO's ongoing performance. We believe that adjusted EBITDA and adjusted EBITDA margin improve comparability from period to period by removing the impact of our capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments that management has determined do not reflect our core operating activities and thereby assist investors with assessing trends in our underlying business. We believe that adjusted net loss and adjusted EPS improve the comparability of our operating results from period to period by removing the impact of certain costs that management has determined do not reflect our core operating activities, including amortization of acquisition-related intangible assets, transaction and integration costs, restructuring costs and other adjustments as set out in the attached tables, and thereby may assist investors with comparisons to prior periods and assessing trends in our underlying business. With respect to our financial outlook for the second quarter of 2025 adjusted EBITDA, a reconciliation of this non-GAAP measure to the corresponding GAAP measure is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from this non-GAAP measure. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statement of income and statement of cash flows prepared in accordance with GAAP that would be required to produce such a reconciliation. Forward-looking Statements This release includes forward-looking statements, including statements relating to our outlook, integration with Coyote Logistics and cash synergies. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as 'anticipate,' 'estimate,' 'believe,' 'continue,' 'could,' 'intend,' 'may,' 'plan,' 'predict,' 'should,' 'will,' 'expect,' 'project,' 'forecast,' 'goal,' 'outlook,' 'target,' or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include the risks discussed in our filings with the SEC and the following: the effect of the completion of the transaction to acquire Coyote Logistics on the parties' business relationships and business generally; competition and pricing pressures; economic conditions generally; fluctuations in fuel prices; increased carrier prices; severe weather, natural disasters, terrorist attacks or similar incidents that cause material disruptions to our operations or the operations of the third-party carriers and independent contractors with which we contract; our dependence on third-party carriers and independent contractors; labor disputes or organizing efforts affecting our workforce and those of our third-party carriers; legal and regulatory challenges to the status of the third-party carriers with which we contract, and their delivery workers, as independent contractors, rather than employees; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; the impact of potential cyber-attacks and information technology or data security breaches; issues related to our intellectual property rights; our ability to access the capital markets and generate sufficient cash flow to satisfy our debt obligations; litigation that may adversely affect our business or reputation; increasingly stringent laws protecting the environment, including transitional risks relating to climate change, that impact our third-party carriers; governmental regulation and political conditions; our ability to attract and retain qualified personnel; our ability to successfully implement our cost and revenue initiatives and other strategies; our ability to successfully manage our growth; our reliance on certain large customers for a significant portion of our revenue; damage to our reputation through unfavorable publicity; our failure to meet performance levels required by our contracts with our customers; the inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; a determination by the IRS that the distribution or certain related separation transactions should be treated as taxable transactions; and the impact of the separation on our businesses, operations and results. All forward-looking statements set forth in this release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law. RXO, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 Revenue $ 1,433 $ 913 Cost of transportation and services (exclusive of depreciation and amortization) 1,153 699 Direct operating expense (exclusive of depreciation and amortization) 48 53 Sales, general and administrative expense 210 145 Depreciation and amortization expense 32 16 Transaction and integration costs 6 1 Restructuring costs 14 11 Operating loss $ (30 ) $ (12 ) Other expense — 1 Interest expense, net 9 8 Loss before income taxes $ (39 ) $ (21 ) Income tax benefit (8 ) (6 ) Net loss $ (31 ) $ (15 ) Loss per share data Basic $ (0.18 ) $ (0.13 ) Diluted $ (0.18 ) $ (0.13 ) Weighted-average common shares outstanding Basic 168,023 117,217 Diluted 168,023 117,217 RXO, Inc. Condensed Consolidated Balance Sheets (Unaudited) March 31, December 31, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 ASSETS Current assets Cash and cash equivalents $ 16 $ 35 Accounts receivable, net of $11 and $13 in allowances, respectively 1,150 1,227 Other current assets 89 77 Total current assets 1,255 1,339 Long-term assets Property and equipment, net of $333 and $317 in accumulated depreciation, respectively 143 135 Operating lease assets 256 276 Goodwill 1,124 1,123 Identifiable intangible assets, net of $134 and $146 in accumulated amortization, respectively 484 499 Other long-term assets 42 42 Total long-term assets 2,049 2,075 Total assets $ 3,304 $ 3,414 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 498 $ 568 Accrued expenses 358 373 Short-term debt and current maturities of long-term debt 17 17 Short-term operating lease liabilities 80 81 Other current liabilities 11 26 Total current liabilities 964 1,065 Long-term liabilities Long-term debt and obligations under finance leases 387 351 Deferred tax liabilities 77 88 Long-term operating lease liabilities 201 215 Other long-term liabilities 88 83 Total long-term liabilities 753 737 Commitments and Contingencies Equity Preferred stock, $0.01 par value; 10,000 shares authorized; 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024 — — Common stock, $0.01 par value; 300,000 shares authorized; 163,912 and 162,517 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively 2 2 Additional paid-in capital 1,908 1,904 Accumulated deficit (315 ) (284 ) Accumulated other comprehensive loss (8 ) (10 ) Total equity 1,587 1,612 Total liabilities and equity $ 3,304 $ 3,414 RXO, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, (In millions) 2025 2024 Operating activities Net loss $ (31 ) $ (15 ) Adjustments to reconcile net loss to net cash from operating activities Depreciation and amortization expense 32 16 Stock compensation expense 7 5 Deferred tax benefit (11 ) (7 ) Impairment of operating lease assets 4 — Other 2 2 Changes in assets and liabilities Accounts receivable 76 27 Other current assets and other long-term assets (10 ) (1 ) Accounts payable (56 ) (41 ) Accrued expenses, other current liabilities and other long-term liabilities (15 ) 21 Net cash provided by (used in) operating activities (2 ) 7 Investing activities Payment for purchases of property and equipment (15 ) (11 ) Business acquisition, net of cash acquired (10 ) — Net cash used in investing activities (25 ) (11 ) Financing activities Proceeds from borrowings on revolving credit facilities 300 39 Repayment of borrowings on revolving credit facilities (265 ) (31 ) Payment for tax withholdings related to vesting of stock compensation awards (17 ) (2 ) Other (11 ) — Net cash provided by financing activities 7 6 Effect of exchange rates on cash, cash equivalents and restricted cash 1 — Net increase (decrease) in cash, cash equivalents and restricted cash (19 ) 2 Cash, cash equivalents, and restricted cash, beginning of period 35 5 Cash, cash equivalents, and restricted cash, end of period $ 16 $ 7 Supplemental disclosure of cash flow information: Leased assets obtained in exchange for new operating lease liabilities $ 4 $ 23 Cash paid for income taxes, net 1 1 Cash paid for interest, net 2 1 Purchases of property and equipment in accounts payable, accrued expenses and other liabilities 11 2 Accrued tax withholdings related to vesting of stock compensation awards 1 — RXO, Inc. Revenue Disaggregated by Service Offering (Unaudited) Three Months Ended March 31, (In millions) 2025 2024 Revenue Truck brokerage $ 1,067 $ 564 Last mile 278 232 Managed transportation 137 152 Eliminations (49 ) (35 ) Total $ 1,433 $ 913 RXO, Inc. Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDA Margin (Unaudited) Three Months Ended March 31, (In millions) 2025 2024 Reconciliation of Net Loss to Adjusted EBITDA Net loss $ (31 ) $ (15 ) Interest expense, net 9 8 Income tax benefit (8 ) (6 ) Depreciation and amortization expense 32 16 Transaction and integration costs 6 1 Restructuring and other costs 14 11 Adjusted EBITDA (1) $ 22 $ 15 Revenue $ 1,433 $ 913 Adjusted EBITDA margin (1) (2) 1.5 % 1.6 % (1) See the 'Non-GAAP Financial Measures' section of the press release. (2) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue. RXO, Inc. Reconciliation of Net Loss to Adjusted Net Loss and Adjusted Diluted Loss Per Share (Unaudited) Three Months Ended March 31, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 Reconciliation of Net Loss to Adjusted Net Loss and Adjusted Diluted Loss Per Share Net loss $ (31 ) $ (15 ) Amortization of intangible assets 15 3 Transaction and integration costs 6 1 Restructuring and other costs 14 11 Income tax associated with adjustments above (1) (9 ) (4 ) Adjusted net loss (2) $ (5 ) $ (4 ) Adjusted diluted loss per share (2) $ (0.03 ) $ (0.03 ) Weighted-average shares outstanding Diluted 168,023 117,217 (1) The tax impact of non-GAAP adjustments represents the tax benefit (expense) calculated using the applicable statutory tax rate that would have been incurred had these adjustments been excluded from net income (loss). Our estimated tax rate on non-GAAP adjustments may differ from our GAAP tax rate due to differences in the methodologies applied. (2) See the 'Non-GAAP Financial Measures' section of the press release. RXO, Inc. Calculation of Gross Margin and Gross Margin as a Percentage of Revenue (Unaudited) Three Months Ended March 31, (Dollars in millions) 2025 2024 Revenue Truck brokerage $ 1,067 $ 564 Complementary services (1) 415 384 Eliminations (49 ) (35 ) Revenue $ 1,433 $ 913 Cost of transportation and services (exclusive of depreciation and amortization) Truck brokerage $ 924 $ 484 Complementary services (1) 278 250 Eliminations (49 ) (35 ) Cost of transportation and services (exclusive of depreciation and amortization) $ 1,153 $ 699 Direct operating expense (exclusive of depreciation and amortization) Truck brokerage $ 1 $ — Complementary services (1) 47 53 Direct operating expense (exclusive of depreciation and amortization) $ 48 $ 53 Direct depreciation and amortization expense Truck brokerage $ — $ — Complementary services (1) 3 2 Direct depreciation and amortization expense $ 3 $ 2 Gross margin Truck brokerage $ 142 $ 80 Complementary services (1) 87 79 Gross margin $ 229 $ 159 Gross margin as a percentage of revenue Truck brokerage 13.3 % 14.2 % Complementary services (1) 21.0 % 20.6 % Gross margin as a percentage of revenue 16.0 % 17.4 % (1) Complementary services include last mile and managed transportation services. View source version on CONTACT: Media Contact Nina Reinhardt [email protected] Contact Kevin Sterling [email protected] KEYWORD: UNITED STATES NORTH AMERICA NORTH CAROLINA INDUSTRY KEYWORD: TRUCKING TECHNOLOGY TRANSPORT LOGISTICS/SUPPLY CHAIN MANAGEMENT OTHER TECHNOLOGY SOFTWARE SOURCE: RXO Copyright Business Wire 2025. PUB: 05/07/2025 06:30 AM/DISC: 05/07/2025 06:29 AM
Yahoo
07-05-2025
- Business
- Yahoo
Global Payments Inc (GPN) Q1 2025 Earnings Call Highlights: Strong Growth and Strategic Moves
The company has yet to complete its target of $500 million to $600 million in revenue dispositions, indicating ongoing restructuring efforts. GPN's adjusted net revenue growth is impacted by dispositions and unfavorable foreign currency exchange rates, which were headwinds in the first quarter. There is potential risk associated with the timing and execution of the Worldpay transaction and its alignment with GPN's transformation agenda. The divestiture of the Issuer Solutions business and acquisition of Worldpay may present integration challenges, especially given past unsuccessful integrations. GPN expects to achieve at least $600 million in cost synergies and $200 million in revenue synergies from the Worldpay acquisition. The acquisition of Worldpay is expected to enhance GPN's global scale and position it as a leading pure-play commerce solutions provider for merchants worldwide. The company is aggressively executing its transformation agenda, including simplifying its organizational structure and increasing its benefit target by 20% to $600 million. Global Payments Inc ( NYSE:GPN ) reported over 5% constant currency adjusted net revenue growth, excluding dispositions, and an 11% constant currency adjusted earnings per share growth compared to the same period in 2024. Story continues Q & A Highlights Q: Can you discuss the rollout plan for the Genius product and how you plan to manage potential back book attrition risk? A: Cameron Bready, CEO, explained that the initial focus is on the front book, building excitement around the product release. Over time, they will work on the back book as clients are ready to transition. They are investing in pathways to make it easy for clients to convert from existing legacy environments to the new Genius platform. Robert Cortopassi, COO, added that the rollout is primarily pull-based, with pathways for back book clients to transition at their own pace without forcing them off their current platforms. Q: Has the improved revenue growth at Worldpay been all organic, and what are your share buyback assumptions for 2026 and 2027? A: Cameron Bready, CEO, confirmed that Worldpay's growth has been purely organic, driven by significant investments in their e-commerce and enterprise business. Joshua Whipple, CFO, stated that they plan to return over $2 billion in share repurchases in 2026 and over $3 billion in 2027, with a mid-teens EPS growth rate expected post-transaction. Q: How important is the acquired orchestration layer in minimizing client disruption and integration risk? A: Cameron Bready, CEO, emphasized that the orchestration layer is critical for providing clients with easy access to products and solutions through a single integration, while simplifying backend processes. Robert Cortopassi, COO, added that it accelerates product delivery across platforms and geographies, enhancing their ability to leverage AI and machine learning capabilities without needing extensive platform consolidation. Q: Are there more dispositions planned for Global Payments, and how does this align with the upcoming deal? A: Cameron Bready, CEO, mentioned that they have targeted $500 million to $600 million in revenue dispositions over the next two years to streamline and simplify the business. They have completed about $300 million so far and plan to continue this process to focus on areas where they are a scale player with the right capabilities. Q: Can you provide an update on the Genius platform rollout and the integration of sales forces with Worldpay? A: Cameron Bready, CEO, stated that the Genius platform will be officially launched in a couple of weeks, with efforts to align all POS capabilities under the Genius brand. Robert Cortopassi, COO, explained that the sales force alignment is complete, with unified leadership and incentive structures in place. They are encouraged by the progress and expect the Worldpay sales force to benefit from the combined capabilities and compensation plans. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
07-05-2025
- Business
- Yahoo
Veolia Acquires CDPQ's 30% Stake in Water Technologies and Solutions, Achieving Full Ownership to Accelerate Value Creation
PARIS, May 07, 2025--(BUSINESS WIRE)--Regulatory News: Veolia (Paris:VIE) has signed an agreement with CDPQ for the acquisition of its 30% stake in Veolia's subsidiary Water Technologies and Solutions ("WTS"), allowing Veolia to achieve full ownership of WTS, enabling to unlock more value potential, simplify further its structure and extract additional run-rate cost synergies of ~€90m. This acquisition is a logical step in the deployment of Veolia's GreenUp strategic roadmap, with an efficient capital allocation to strengthen the Group's anchoring in Water technologies activities and in the United States, both identified as priority growth "boosters". The acquisition of CDPQ's minority interests will further strengthen Veolia's unique positioning as a global leader in Water Technologies. The Group is perfectly positioned to take advantage of the growing demand for innovative water treatment technologies and solutions, fueled by macro-trends such as water scarcity, adaptation to climate change, health concerns and the development of strategic industries such as semiconductors, pharmaceuticals and data centers. The acquisition of the remaining 30% of Veolia's subsidiary WTS will allow full operational control, enabling it to enhance operational performance and seize all opportunities for development and innovation, through a complete integration process. Following the acquisition, the Group will be able to unlock additional ~€90m of run-rate cost synergies by 2027. Those synergies are already well-identified and benefit from a very low execution risk, given the deep and intimate knowledge of the asset and Veolia's proven track-record in synergies extraction. The acquisition is expected to be accretive from 2026 and will contribute to improve Group ROCE. The purchase price for the acquisition will be $1.75bn (~€1.5bn), corresponding to ~11x EV/post-synergies 2025e EBITDA. Post-transaction, Veolia will still maintain headroom compared to its Net Debt / EBITDA target of 3x, allowing the Group to retain strategic flexibility to continue to deploy its GreenUp strategic plan. Veolia confirms all 2025 guidance and GreenUp targets previously communicated both at Group level and at Water Technologies level, and now aims to achieve an EBITDA CAGR of at least +10%(1) over the 2023-2027 period for its Water Technologies division. "This acquisition marks a pivotal step in unlocking the full value potential of Water Technologies, a growth booster identified as a priority in our GreenUp strategic plan, and a segment where we are already a market leader. Full ownership will enable us to accelerate growth, enhance operational efficiency and synergies as well as deepen the alignment with strategic priorities. This move is especially crucial given the urgent and rapidly evolving needs of the market, allowing us to respond faster and more effectively to emerging opportunities and challenges," said Estelle Brachlianoff, Veolia's Chief Executive Officer.
