Solid Waste & Recycling

Feature

Hot Sector News (August 01, 2000)

The solid waste industry has experienced consolidation over the last several years as mergers, acquisitions and the subsequent integration challenges of industry leaders dominate the headlines. A numb...


The solid waste industry has experienced consolidation over the last several years as mergers, acquisitions and the subsequent integration challenges of industry leaders dominate the headlines. A number of significant announcements have shown that this industry consolidation trend has spread from North America to the rest of the world.

Waste Management Inc.’s decision to focus on its North American operations has opened up a number of acquisition opportunities for European companies. In June, Severn Trent plc purchased the UK operations of WMI for US$574-million and Marius Pedersen Holding A/Spurchased WMI’s operations in Denmark, Slovakia and the Czech Republic for US$120-million.

Vivendi SA merged with Canal+ and The Seagram Company Ltd. in a US$34-billion deal. Subsequently, the company sold approximately 30 per cent of its environmental business, Vivendi Environnement, in an Initial Public Offering in France. Since Vivendi has changed its corporate structure to focus on the communications and media sectors, it will be removed from the Solid Waste index.

Waste Recycling Group plc of Doncaster, UK will join the index. Waste Recycling is listed on the London Stock Exchange, and provides solid and liquid waste treatment services including the operation of landfills and recycling facilities. The company recorded revenues of GBP 139.3-million in 1999 primarily due to two major acquisitions.

Solid Waste Index

Solid Waste Index Symbol Exchange $Jan98 $May00 $July00 %Index %Change Shares $OrigValu $CurValu
Allied Waste Industries Inc. AW N.Y 20.38 9.56 10.5 10 9.38 37 750 386
Capital Environmental Res CERI NASDAQ 11.00 3.63 3.19 10 -12.12 68 750 217
Casella Waste Systems Inc. CWST NASDAQ 24.75 12.63 12.31 10 -2.53 30 750 373
Imco Recycling Inc. IMR N.Y 16.75 6.75 5.38 5 -20.30 22 375 120

Kafus Industries Ltd. KS AMEX 3.32 3.5 3 10 -14.29 226 750 678

Marsulex Inc. MLX T.O 6.00 3.5 3.4 5 -2.86 63 375 212

Republic Services Inc. RSG N.Y 24 16.56 16.31 10 -1.51 31 750 509

Safety-Kleen Corp. SK N.Y 15.75 0.63 0.22 10 -65.08 48 750 10

Waste Connections Inc. WCNX NASDAQ 12 18.19 19 10 4.45 63 750 1187

Waste Recycling Group plc

(GBP) WRC London 3.25 4.11 4.04 10 -1.70 231 750 930
Waste Management Inc. WMI N.Y 23.75 20.38 18.44 10 -9.52 32 750 582
Total 100 $7,500 $5,208

(Note: numbers rounded, * denotes weighting change)

Statistics

Starting Point Jan 98 May 00 July 00 Percentage Return
Solid Waste Index 7500 5418 5208 -3.88%
DOW 7322 10299 10733 4.21%
TSE Composite 6700 9022 10842 20.20%

Technical analysis: The Waste Index is calculated on a bimonthly basis. In order to maintain consistency and to meet the publishing deadline, it’s calculated on the last Friday of the second month of the given time period. The graph is plotted on a biweekly basis and the final point on the graph represents the closing values for the three indices Friday July 21. The index was started at a value of 7500 points so that its magnitude is in the same range as the DOW and the TSE. It’s made up of a proportional representation of the firms listed, broken down by the itemized percentages. Share quotes ignore currency.


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