BY Richard Summerfield
American waste and environmental services company Waste Management has agreed to acquire smaller rival Advanced Disposal in a deal worth $4.9bn, including debt.
Waste Management will pay around $33.15 per share for Advanced Disposal, a premium of about 22 percent to Advanced Disposal’s closing price of $27.14 on Friday 12 April, the day before rumours of the deal first appeared. Once completed, the deal will be Waste Management’s biggest acquisition in more than nine years. The companies anticipate the deal will generate more than $100m in savings and capital expenditures annually after close, expected by the first quarter of 2020.
Advanced Disposal is the fourth-largest solid waste company in the US and provides non-hazardous solid waste collection, transfer, recycling and disposal services in 16 states and the Bahamas. Waste Management is the leading company in the sector. Waste Management has around 21 million customers; the deal will add more than 3 million residential and industrial customers, mostly in the eastern half of the US, where Advanced operates.
“At Waste Management, we focus on creating value for all stakeholders, delivering on our commitments to employees, customers, community partners, shareholders and the environment.,” said Jim Fish, president and chief executive officer Waste Management. “The acquisition of Advanced Disposal extends these commitments by adding complementary assets and operations as well as a team with a shared focus on safety, outstanding service and operational excellence.”
He added: “With this acquisition, we will grow our asset footprint to serve more customers and communities and generate significant growth and value creation opportunities for Waste Management’s shareholders and our combined company’s employee base. Waste Management’s disciplined capital allocation and balance sheet strength position us well to execute upon this unique opportunity to expand our scale and capabilities to serve an even broader customer base and realize the strategic and financial benefits the acquisition of Advanced Disposal creates.”
“We are pleased to have reached this milestone agreement with Waste Management to deliver an immediate cash premium to Advanced Disposal stockholders,” said Richard Burke, chief executive of Advanced Disposal. “We view Waste Management as an industry leader with one of the most respected brands in the nation.
“This acquisition stands as a testament to the strength of the Advanced Disposal business and brings together two strong waste management teams with extensive environmental services expertise to better serve our customers and communities,” he continued. “We look forward to working with the Waste Management team to complete the transaction and ensure that we continue to deliver the highest quality service to our customers.”
News: Waste Management to buy Advanced Disposal for about $3 billion in cash