HOUSTON & PONTE VEDRA, Fla.– Waste Management will acquire all outstanding shares of Advanced Disposal for $33.15 per share in cash, representing a total enterprise value of US$4.9 billion when including approximately $1.9 billion of Advanced Disposal’s net debt.
With 2018 revenues of $1.56 billion, adjusted EBITDA of $427 millionand approximately 6,000 employees, Advanced Disposal serves more than three million residential, commercial, and industrial customers, including over 800 municipalities primarily in 16 states in the eastern half of the United States. Advanced Disposal’s solid waste network includes 94 collection operations, 73 transfer stations, 41 landfills, and 22 owned or operated recycling facilities.
“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,” said Jim Fish, president and CEO of Waste Management.
“We are pleased to have reached this milestone agreement with Waste Management to deliver an immediate cash premium to Advanced Disposal stockholders. We view Waste Management as an industry leader with one of the most respected brands in the nation,” said Richard Burke, CEO of Advanced Disposal.
“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. 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.”
Waste Management expects the transaction to generate more than $100 million in annual cost and capital expenditure synergies. The Advanced Disposal acquisition will be immediately accretive to Waste Management’s adjusted earnings per share and cash flow, with near-term benefits expected from core operating performance and SG&A cost savings.
The transaction is not subject to a financing condition. Waste Management intends to finance the transaction using a combination of bank debt and senior notes.
The transaction, which was unanimously approved by the boards of directors of both companies, is expected to close by the first quarter of 2020, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by a majority of the holders of Advanced Disposal’s outstanding common shares.
In connection with the definitive agreement, Canada Pension Plan Investment Board, which owns approximately 19 per cent of Advanced Disposal’s outstanding shares, has, under the terms of a voting agreement, agreed to vote its shares in favor of the transaction.