WM to acquire Stericycle in $7.2bn medical waste deal

BY Fraser Tennant

In a transaction that expands its environmental solutions in a growing healthcare market, WM is to acquire fellow medical waste management company Stericycle for approximately $7.2bn.

Under the terms of the definitive agreement, WM will acquire all outstanding shares of Stericycle for $62 per share in cash, representing a premium of 24 percent to Stericycle’s 60-day volume weighted average price as of 23 May 2024.

The acquisition advances WM’s growth strategy, underscores the importance of executing its sustainability initiatives and aligns with its financial goals, including growth in operating earnings before interest, taxes, depreciation and amortisation and cash flow.

Previously known as Waste Management and based in Houston, Texas, WM is driven by commitments to put people first and achieve success with integrity. Through its subsidiaries, WM provides collection, recycling and disposal services to millions of residential, commercial, industrial and municipal customers throughout the US and Canada.

“We have a proven track record of integrating and optimising acquired businesses that benefit our customers and employees and deliver a strong return on investment for our shareholders,” said Jim Fish, president and chief executive of WM. “We look forward to working with the Stericycle team to capture the strategic, customer service, environmental and financial benefits of this acquisition.”

A US-based business to business services company and a leading provider of compliance-based solutions that protect people and brands, promote health and wellbeing and safeguard the environment, Stericycle provides customers in North America and Europe with solutions for regulated waste and compliance services and secure information destruction.

“Our sustained focus and commitment to transforming our business over the past five years has uniquely positioned Stericycle for this transaction,” said Cindy J. Miller, president and chief executive of Stericycle. “This deal creates significant value for shareholders, unlocks new opportunities to deliver diversified services to customers, and supports investment in the growth and development of our team members.”

The transaction has been unanimously approved by the boards of directors of both companies.

Expected to close as early as the fourth quarter of 2024, the transaction is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by a majority of the holders of Stericycle’s outstanding common shares.

Mr Fish concluded: “The acquisition of Stericycle broadens the scope of our service offerings and brings together the leader in solid waste and a premier company in regulated medical waste services.”

News: Waste Management adds medical-waste portfolio with $7.2 bln Stericycle deal

ConocoPhillips strikes $22.5bn Marathon deal

BY Richard Summerfield

ConocoPhillips has agreed to acquire Marathon Oil in an all-stock transaction with an enterprise value of $22.5bn, including $5.4bn of net debt.

Under the terms of the deal, Marathon shareholders will receive 0.2550 shares of Conoco common stock for each share of Marathon common stock held, representing a 14.7 percent premium to Marathon’s closing share price on 28 May 2024, and a 16 percent premium to the prior 10-day volume-weighted average price.

The deal, which is expected to close in the fourth quarter of 2024, subject to the approval of Marathon’s stockholders, regulatory clearance and other customary closing conditions, is the latest in a spate of recent consolidation deals in the oil & gas industry. 2023 saw transactions worth a total of $250bn struck by companies in the space, and significant dealmaking has continued throughout the first half of 2024.

“This acquisition of Marathon Oil further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory adjacent to our leading US unconventional position,” said Ryan Lance, chairman and chief executive of ConocoPhillips. “Importantly, we share similar values and cultures with a focus on operating safely and responsibly to create long-term value for our shareholders. The transaction is immediately accretive to earnings, cash flows and distributions per share, and we see significant synergy potential.”

“Powered by our dedicated employees and contractors, we built a top performing portfolio with a multi-year track record of peer-leading operational execution, strong financial results and compelling return of capital to our shareholders - all while holding true to our core values of safety and environmental excellence,” said Lee Tillman, chairman, president and chief executive of Marathon Oil. “ConocoPhillips is the right home to build on that legacy, offering a truly unique combination of added scale, resilience and long-term durability.”

According to a statement announcing the deal, Conoco expects to achieve at least $500m of run rate cost and capital savings within the first full year following the closing of the transaction. Furthermore, independent of the transaction, Conoco expects to increase its ordinary base dividend by 34 percent to 78 cents per share starting in the fourth quarter of 2024.

Upon closing of the transaction, Conoco expects share buybacks to be over $20bn in the first three years, with over $7bn in the first full year, at recent commodity prices.

News: ConocoPhillips to buy Marathon Oil for $22.5 billion in latest energy merger

Biogen acquires HI-Bio in $1.8bn deal

BY Fraser Tennant

In a deal that bolsters its late-stage pipeline, US multinational biopharmaceutical company Biogen Inc. is to acquire privately-held clinical-stage biotechnology firm Human Immunology Biosciences (HI-Bio) for $1.8bn.

Under the terms of the definitive agreement, Biogen will make an upfront payment to HI-Bio of $1.15bn, with HI-Bio’s stockholders eligible for payments of up to an additional $650m. 

Biogen also plans to leverage its existing global development and commercialisation capabilities in rare diseases and its strong scientific expertise in immunology to support the advancement of felzartamab and the HI-Bio pipeline.

Felzartamab, HI-Bio’s lead asset, is a fully human anti-CD38 monoclonal antibody that has been shown in clinical studies to selectively deplete CD38-plus cells including plasma cells and natural killer, or NK, cells which may allow for additional applications that improve clinical outcomes in a broad range of immune-mediated diseases.

“This late-stage asset has demonstrated its impact on key biomarkers and clinical endpoints in three renal diseases with serious unmet needs,” said Priya Singhal, head of development at Biogen. “It is a strategic addition to the Biogen portfolio as we continue to augment our pipeline and build on our expertise in immunology.”

Founded in 1978, Biogen is a leading biotechnology company that pioneers innovative science to deliver new medicines to transform patients’ lives and to create value for shareholders and our communities.

“With its deep development and commercialisation capabilities, Biogen is in a position to accelerate the development of new medicines, including felzartamab, for patients with severe immune-mediated diseases,” said Travis Murdoch, chief executive of HI-Bio. “We are excited to combine the HI-Bio team’s expertise with Biogen’s global footprint.”

In addition to lead programme felzartamab, the HI-Bio pipeline includes izastobart/HIB210, an anti-C5aR1 antibody currently in a phase 1 trial and with potential for continued development in a range of complement-mediated diseases. HI-Bio also has discovery stage mast cell programmes with potential in a range of immune-mediated diseases.

The transaction is subject to customary closing conditions, including receipt of necessary regulatory approvals, and is currently anticipated to close in the third quarter of 2024.

News: Biogen in up to $1.8 bln deal as rare diseases take center stage

SouthState to acquire Independent Bank Group in $2bn deal

BY Richard Summerfield

SouthState Corporation and Independent Bank Group, Inc. have entered into a definitive agreement under which SouthState will acquire Independent Bank Group, in an all-stock transaction valued at approximately $2bn.

Under the terms of the deal, which is expected to close by the end of Q1 2025, Independent Bank shareholders will receive 0.60 shares of SouthState for each stock they own. The deal values Independent Bank at $48.51 per share, which represents a 10.4 percent premium to the stock’s last close before the deal was announced.

According to a statement announcing the deal, the combined bank will have total assets of $65bn and a market capitalisation of around $8.2bn. The transaction will also help deepen SouthState’s presence in the Dallas-Fort Worth, Austin and Houston areas in Texas, as well as the Colorado Front Range.

“With a local, geographic management model, an industry-leading track record on credit and a presence in some of the best markets in the country, Independent Bank Group is a great fit with SouthState,” said John C. Corbett, chief executive of SouthState.”

“We are excited about the opportunity to join SouthState, a company whose culture, business model and credit discipline matches well with ours,” said David R. Brooks, chairman and chief executive of Independent Bank Group. “The combination of these two companies operating in growing markets provides a great opportunity for our Independent Bank Group teammates, clients and communities to flourish.”

The transaction has been approved by the boards of directors of SouthState and Independent Bank Group by the unanimous vote of directors present at their respective meetings. Completion of the transaction is subject to customary closing conditions, including receipt of required regulatory approvals and approval from shareholders of Independent Bank Group and SouthState. Upon completion of the deal, three Independent Bank directors will join SouthState’s board.

The deal is the most recent in a number of consolidation deals in the US regional banking space. Last month, UMB Financial agreed to buy Heartland Financial in a deal worth around $2bn.

News: Regional lender SouthState to buy Texas-based Independent Bank for about $2 bln

Telecom deal value leaps in Q1 2024 – report

BY Richard Summerfield

Amid a period of upheaval in the telecommunications sector, companies are turning to M&A to drive their business forward, according to analysis by Bain & Company. Integrated telcos are becoming disaggregated and narrowly focused business models are emerging, altering the telecommunications landscape.

With this shift, M&A deal value in the telecommunications space spiked in the first quarter of 2024, as some telcos increased scale and others expanded in adjacent sectors such as finance and insurance, according to Bain.

Indeed, deal value increased significantly from around $2bn in Q1 2023 to almost $21bn in Q1 2024. Though the figure is down from $35bn in Q4 2023, a single deal - Telecom Italia’s $23.3bn agreement to sell its fixed network business to KKR - accounted for two-thirds of that quarter’s value. By comparison, the largest announced transaction in Q1 2024 was a scale deal which saw Swisscom agree to acquire Vodafone Italia for $8.7bn and merge it with Swisscom’s Italian subsidiary Fastweb.

Europe has been the focal point of many industry transactions in recent years, driven by in-country scale deals and infrastructure divestments. Scale deals accounted for slightly more than half of global deal value in the first quarter of the year, a notable shift from each of the past two years, when this category made up less than a quarter of deal value. Infrastructure divestments dominated telecom M&A from 2019 to 2022, but high interest rates and other macroeconomic challenges have reversed that trend of late.

According to Bain, factors such as fibre network consolidation will likely spur deals going forward. Brazil and the US are some of the largest markets where such consolidation is expected to occur. Likewise, enterprise services and other higher-growth segments are set to attract deals, with private equity firms expected to be among the most active dealmakers.

News: Telecom M&A: Here Are the Latest Deal Trends Worldwide