Waste Management Agrees to Buy Advanced Disposal

The $2.9 billion deal would expand Waste Management’s presence in the eastern U.S.
Lauren MuskettApril 15, 2019
Waste Management Agrees to Buy Advanced Disposal

Waste Management announced it reached an agreement to buy Advanced Disposal Services for about $3 billion.

In a statement, Waste Management said one of its subsidiaries would acquire all outstanding Advanced Disposal shares for $33.15 per share in cash, a 22.1% premium to Advanced Disposal’s closing price of $27.14 on Friday

The companies said the deal represents a total enterprise value of $4.9 billion, including about $1.9 billion of Advanced Disposal’s debt. It would be Waste Management’s biggest acquisition in more than nine years.

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Waste Management said it plans to finance the deal using a combination of bank debt and senior notes.

Advanced Disposal had revenue of $1.56 billion in 2018, the companies said, and served more than three million customers, mostly in the eastern United States. The company reported adjusted EBITDA of $427 million in 2018. The companies said they expected the deal to generate more than $100 million in savings and capital expenditures annually.

Waste Management is being advised by Centerview Partners. Advanced Disposal is being advised by UBS Investment Bank.

“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 CEO Jim Fish said in a statement.

Waste Management shares were up more than 2.6% in midday trading. Advanced Disposal shares were up nearly 19%.

“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.

The deal is expected to close in the first quarter of 2020.

Advanced Disposal is the fourth-largest waste-management company in the United States. Waste Management is the largest.