Calgary-based waste processing and environmental services company Tervita says it is well ahead of schedule realizing the benefits of its merger last year with competitor Newalta.
The deal, which closed in July 2018, launched the previously privately-traded Tervita on the Toronto Stock Exchange.
The company said at the time it expected to find up to $45 million in annual synergies within two years, with associated one-time costs of $15 million to $20 million.
Tervita announced on August 1 that it has already met that $45 million goal.
“The company expects $44 million to be realized in 2019 and believes it can now achieve at least $46 million on an annualized basis. This is particularly impressive in consideration of the significant deterioration in the WCSB oilfield services activity environment since the Newalta deal closed in July 2018,” GMP FirstEnergy analyst Ian Gillies wrote in a research note this week.
The cost to execute these synergies is now expected to be $24 million, he added.
Tervita continues to see a project pipeline of $200 million to $300 million of near to medium term organic growth opportunities, largely composed of water disposal in the Montney/Duvernay regions and storage/blending opportunities at existing facilities, Gillies said.
In June the company announced a contract with an unnamed senior producer to develop a water disposal network in the Montney play, which Gillies estimated will carry a capital cost of $25 million to $30 million.