Trash Collectors May Be Coming for Mom-and-Pops

Date : 04/15/2019 @ 6:15PM
Source : Dow Jones News
Stock : Advanced Disposal Services, Inc. (ADSW)
Quote : 32.48  -0.25 (-0.76%) @ 9:00PM

Trash Collectors May Be Coming for Mom-and-Pops

ADVANCED DISPOSAL SERVICES, INC. (NYSE:ADSW)
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By Lauren Silva Laughlin 

The garbage big boys are bulking up. On Monday, the largest U.S. trash collector, Waste Management, picked off the fourth-heftiest in the sector, Advanced Disposal Services, in a $2.9 billion deal. Recent consolidation leaves only small players to scoop up.

Nearly a fifth of the industry is made up of private companies with annual revenue of less than $100 million, according to Oppenheimer. Acquisition sizes are tiny -- for Waste Management, smaller deals in existing markets run about $3 million. An industry roll-up in the past decade left 4,000 private operators.

Pressure to consolidate remains intense. China recently reduced the buying of recycled cardboard, which sent prices plummeting. As a result, companies such as Waste Management have been forced to look at how municipalities pay for services, among other things.

Going into a new town with some muscle can't hurt. With recent tax changes keeping valuations afloat, Waste Management's trash binge probably won't stop.

Write to Lauren Silva Laughlin at lauren.silvalaughlin@wsj.com

 

(END) Dow Jones Newswires

April 15, 2019 13:00 ET (17:00 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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