The strategic transaction involves the divestment of Tox Free's Tasmania and Rockhampton businesses to JJR in what the pair described as an "effective asset swap at equivalent earnings and asset value".

 

Tox Free said the Roma assets and revenues better align with its strategic focus and provided opportunity to strengthen its existing business in Roma and realise synergies 

 

The company said it had spent the past five years diversifying to become a leading provider of specialist waste management and industrial services across the resources, health, industrial and regulated waste sectors.

 

In that time it had identified several assets that were not in alignment with the strategy, including the Tasmanian and Rockhampton municipal and commercial waste services businesses that were acquired in 2013.

 

It said the businesses were better off being handed off to another company so it could recycle capital into more strategic and better returning assets, such as Queensland's CSG sector.

 

Tox Free said the JJR assets would complement its existing business activities in the Surat Basin, where it has contracts with Origin Energy, the upstream operator of the Australian Pacific LNG project and the Santos-operated Gladstone LNG fields.

 

JJR has major contracts with Schlumberger for Origin production drilling, as well as several other industrial clients in the region, all of will transfer to Toxfree as part of the transaction.

 

"The CSG sector in central Queensland is a very attractive market for Toxfree and we expect to realise synergies and improve our returns through consolidation with our existing our industrial services business in Roma," Tox Free managing director Steve Gostlow said.

 

"The region will be a large gas production hub for decades to come, and Toxfree is focused on positioning its business as the leading provider of specialist waste and industrial services to this market."