Waste Management Nears $2.9 Billion Deal for Advanced Disposal
15 April 2019 - 12:00PM
Dow Jones News
By Dana Mattioli and Cara Lombardo
Waste Management Inc. is nearing a roughly $2.9 billion deal to
buy its smaller rival Advanced Disposal Services Inc., according to
people familiar with the matter, in what would be the biggest
acquisition in its history.
Waste Management would pay $33.15 a share in cash for Advanced
Disposal, the people said. The deal, which could be announced
Monday, represents a 22.1% premium to Advanced Disposal's trading
price at Friday's close and will rank as one of the biggest
solid-waste company acquisitions in more than a decade. Including
debt, the deal would be worth nearly $5 billion.
A deal would bring together the no. 1 and no. 4 companies in the
sector.
Advanced Disposal, based in Ponte Vedra, Fla., is a waste and
recycling collector serving roughly 2.8 million residential
customers and 200,000 commercial customers in around 16 states and
the Bahamas. It also owns or operates around 60 landfills and
recycling centers. The company went public in 2016 and is
part-owned by the Canada Pension Plan Investment Board, which,
according to one of the people, has agreed to vote for the deal.
CPPIB owns around 19% of the company, according to Refinitiv.
There is no guarantee the talks won't fall apart at the last
minute.
Houston-based Waste Management is the largest solid-waste
company in the U.S., with a market value of more than $40 billion.
It owns or operates roughly 250 landfills, the largest network in
the country.
The deal would broaden Waste Management's geographic footprint,
adding attractive regions in the waste collection and landfill
segments in states like Minnesota, Illinois, Wisconsin and
Indiana.
Waste Management last year spent more than $450 million on
acquisitions and Chief Executive James Fish said on a recent
earnings call that it planned to continue spending on deals in
2019. The Advanced Disposal purchase is expected to yield more than
$100 million in annual synergies, one of the people said.
Last month, a Waste Management subsidiary announced the
acquisition of Petro Waste Environmental, which provides
environmental services and solid-waste disposal to the oil-and-gas
industry.
Write to Dana Mattioli at dana.mattioli@wsj.com and Cara
Lombardo at cara.lombardo@wsj.com
(END) Dow Jones Newswires
April 14, 2019 21:45 ET (01:45 GMT)
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