Orizon Valorização de Resíduos (ORVR3) M&A announcement summary

Deal rationale and strategic fit

• Creates the largest waste management company in Brazil, expanding from 18 to 30 ecoparks and broadening presence to 15 states, consolidating leadership and integrating complementary capabilities.

• Strategic fit based on cultural and governance alignment, with both parties committed to long-term value creation and joint growth.

• Strengthens position in environmental attributes, including carbon credits and renewable natural gas, and aligns with mature market trends.

• Enables participation in new PPPs, integrated management contracts, and expansion into new markets such as Belo Horizonte and Espírito Santo.

• Enhances business resilience through long-term contracts and integrated management concessions.

Financial terms and conditions

• Payment is through issuance of 41.2 million Orizon shares to Vital shareholders, representing 30% of the combined company, plus a subscription bonus.

• Transaction values range from BRL 2.4 to 2.9 billion in equity, with enterprise value estimated between BRL 2.8 and 3.3 billion and an EV/EBITDA multiple of 5.6x to 6.6x.

• Shareholding structure post-transaction: 30.1% Orizon controllers, 30% Vital controllers, 39.9% free float.

• Shareholder agreement includes a 12-month initial term, a 20-year long-term agreement (extendable by 5 years), and governance split between current controllers and Vital's family shareholders.

• Lock-up period of 18 months from the association agreement or 12 months from the shareholders' agreement, whichever is later.

Synergies and expected cost savings

• Significant operational and tax efficiencies expected from scale in equipment procurement, unified operations, and combining businesses.

• Integration of complementary assets and expertise, especially in biomethane and carbon credit generation.

• Potential for higher average gate fees, improved margins, and increased revenue per ton through integrated management and contract optimization.

• Integration expected to preserve high margins and boost EBITDA to approximately BRL 1 billion.