ASX 200 jumps, Cleanaway’s treasured acquisition, Afterpay soars

The S&P/ASX 200 Index (ASX:XJO) has gone up around 1% today. Cleanaway Waste Management Ltd (ASX:CWY) revealed a big acquisition.
The post ASX 200 jumps, Cleanaway’s treasured acquisition, Afterpay soars appeared first on The Motley Fool Australia. –

The S&P/ASX 200 Index (ASX: XJO) rose by 0.8% to 6,886 points today.

One of the highlights of the day was that New Zealand will start allowing Australians to fly there without quarantine in a couple of weeks. However, if there’s an outbreak then people may need to be prepared for borders to be closed again or hotel quarantine coming back temporarily.

Here are some of the other highlights for the ASX:

Cleanaway Waste Management Ltd (ASX: CWY)

The Cleanaway share price jumped around 16% today after the waste management business gave an update regarding its proposed acquisition of the Suez recycling and recovery business in Australia. It may buy the business for $2.52 billion.

At this stage it’s still not a done deal because Suez may terminate the deal if Veolia Environnement ends up acquiring the parent Suez business.

If Cleanaway’s acquisition is going ahead, it will fund it through new equity and debt.

However, if the deal is terminated because of an agreement in principle for a takeover offer, then Cleanaway will buy some post collection assets in Sydney for $501 million.

In the 2020 calendar year, Cleanaway generated $1.4 billion of revenue, normalised earnings before interest, tax, depreciation and amortisation (EBITDA) of $216 million and operating free cashflow of $199 million.

The acquisition price is 11.7x normalised CY20 EBITDA before synergies, which are expected to be $70 million per annum, which should be realised by FY25 by the ASX 200 share.

Cleanaway chief operating officer Brendan Gill said:

Importantly, there is also strong alignment of operating approaches. The transition is expected to bring together two highly complementary businesses and be strongly accretive to earnings per share when the integration is completed.

Cleanaway will continue to maintain a strong balance sheet following whichever transition is completed and will retain ample capacity to support future growth for the combined group.

Afterpay Ltd (ASX: APT)

The Afterpay share price was one of the best performers in the ASX 200 today, rising by around 10%.

Afterpay revealed that its Afterpay Day sales in the US was a success, which drove a 35% increase in new active customers to the platform and traffic to merchants was also strong, with almost six million referrals to global merchants.

The buy now, pay later business said that the total number of customers that have signed up to Afterpay in the US now exceeds 16 million and the total number of global retail partners has reached almost 75,000. There is also a strong pipeline of new merchants continuing to launch in 2021.

Melissa David, Afterpay head of North America, said:

As evidenced by the numbers, Afterpay Day delivered new customers, drove increased sales and increased basket sizes online and in-store for the more than 3,000 participating merchants in North America.

Regis Resources Limited (ASX: RRL)

The Regis Resources share price went up around 3.4% after the gold miner announced that acceleration of exploration at the Ben Hur deposit after the acquisition in late 2020 has grown the mineral resource by 34% and allows the declaration of its maiden ore reserve.

Regis’ managing director, Jim Beyer, said:

Regis prioritised the work at Ben Hur and as a result the team has been able to efficiently realise some of the potential of the project within seven months of acquiring it.

The maiden reserve feeds straight into Regis’ strategy of internal value growth through mine life extension for our Duketon operations. We remain very excited by the potential for continued exploration success at Ben Hur and across the Duketon Greenstone Belt generally.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX 200 jumps, Cleanaway’s treasured acquisition, Afterpay soars appeared first on The Motley Fool Australia.

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