- Waste Management’s Pending Acquisition of Advanced Disposal
Will Combine Dedicated and Experienced Teams with Shared
Commitments to Safety, Outstanding Customer Service and Operating
Excellence
- Amended Definitive Agreement to Acquire Advanced Disposal for
$30.30 per share in cash, Representing a $4.6 Billion Enterprise
Value
- Both Waste Management and Advanced Disposal Remain Confident in
the Long-Term Strength of their Businesses
- Waste Management Continues to be Confident in the Long-Term
Value from the Acquisition and Expects Annual Cost and Capital
Expenditure Synergies to Exceed the $100 Million Previously
Announced
- Definitive Agreement to sell to GFL Environmental Substantially
All Anticipated Divestitures
- Amendment and Divestiture Agreement Provide Increased Closing
Certainty
- Waste Management, Advanced Disposal, and GFL Environmental
Continue to Work Cooperatively with the U.S. Department of Justice
to Expeditiously Gain Regulatory Clearance
Waste Management, Inc. (NYSE: WM) and Advanced Disposal
Services, Inc. (NYSE: ADSW) announced today that they have amended
the terms of the definitive agreement under which a subsidiary of
Waste Management will acquire all outstanding shares of Advanced
Disposal for $30.30 per share in cash, representing a total
enterprise value of $4.6 billion when including approximately $1.8
billion of Advanced Disposal’s net debt.
Waste Management and Advanced Disposal also announced today that
they have entered into an agreement for GFL Environmental to
acquire a combination of Advanced Disposal and Waste Management
assets for $835 million, representing approximately $345 million in
total revenue based on 2019 results. Approximately $300 million of
the total revenue is related to assets and businesses being sold to
GFL Environmental to address substantially all of the divestitures
expected to be required by the U.S. Department of Justice. As with
the Advanced Disposal acquisition, the sale of assets to GFL
Environmental remains subject to clearance from the U.S. Department
of Justice and is also conditioned on the closing of Waste
Management’s acquisition of Advanced Disposal.
“We continue to be excited by the compelling strategic rationale
and financial benefits of the Advanced Disposal acquisition,” said
Jim Fish, President and Chief Executive Officer of Waste
Management. “Over the last several months, as we have worked to
gain regulatory approval from the U.S. Department of Justice, we
have become increasingly convinced that the people and customer
additions this acquisition brings to Waste Management will be of
tremendous value and we are confident that Waste Management’s
operational excellence will allow us to achieve expected synergies.
In addition, we are pleased to have reached an agreement with GFL
Environmental for substantially all of the divestitures anticipated
to be required by the U.S. Department of Justice at a valuation
that appropriately reflects the high-quality nature of the Advanced
Disposal and Waste Management assets to be sold. Today’s
announcement positions us to move forward with collective focus on
satisfying the U.S. Department of Justice review process and
successfully completing both transactions.”
“We believe the revised agreement with Waste Management, coupled
with our joint agreement to sell substantially all of the
divestitures to GFL Environmental, delivers significant value and
certainty of closing to Advanced Disposal stockholders,” said
Richard Burke, Chief Executive Officer of Advanced Disposal. “We
continue to work hand in hand with the Waste Management team, GFL
Environmental, and the U.S. Department of Justice to gain
regulatory clearance and complete the transaction.”
Reiterates Compelling Strategic and Financial
Benefits
Waste Management expects the Advanced Disposal acquisition to
advance its growth strategy and align with its financial goals,
including strong returns on invested capital and growth in earnings
per share, margins, and cash flow. Specifically, Waste Management
continues to expect the acquisition of Advanced Disposal to:
- Expand Waste Management’s Talent, Footprint and Customer
Base. This acquisition brings together high-quality,
complementary teams, asset networks and customers under Waste
Management’s proven leadership. Waste Management has a strong
commitment to people and customers and a track record of
operational excellence that will continue to provide world class
service to an expanded customer base.
- Create Significant Synergies and Grow Waste Management’s
Earnings and Cash Flows. Having completed significant
additional diligence, Waste Management expects annual cost and
capital expenditure synergies to exceed the $100 million previously
announced. Waste Management continues to expect near-term benefits
to be driven by core operating performance and SG&A cost
savings, with long-term margin expansion and improved free cash
flow conversion from network optimization, operating and capital
efficiencies and an improved cost of capital.
- Support Waste Management’s Capital Allocation
Priorities. The Advanced Disposal acquisition will enhance
Waste Management’s cash flow growth and support its commitment to
deliver strong shareholder returns.
- Continue a Commitment to Outstanding Customer Service and
Sustainable Waste Solutions. The acquisition will join two
teams of dedicated employees who are passionate about helping to
manage the environmental needs of customers and communities with
outstanding service and a commitment to safety. Waste Management
expects to continue making investments in employees, technology,
and capital equipment to further grow the business, and ensure
superior, reliable customer service.
Timing and Approvals
The Advanced Disposal acquisition, which was unanimously
approved by the boards of directors of both companies, is expected
to close by the end of the third quarter of 2020, subject to the
satisfaction of customary closing conditions, including regulatory
approvals and approval of the amended definitive agreement by a
majority of the holders of Advanced Disposal’s outstanding common
shares. Canada Pension Plan Investment Board, which owns
approximately 18% of Advanced Disposal’s outstanding shares, has
entered into an amended and restated voting agreement whereby it
has agreed under the terms of the agreement to vote its shares in
favor of the amended transaction. Waste Management, Advanced
Disposal, and GFL Environmental continue to work cooperatively with
the U.S. Department of Justice to obtain necessary regulatory
clearance. Waste Management and Advanced Disposal are pleased with
the progress that has been made to date and believe they are on
track to receive final regulatory approval in a timeframe that is
complementary to the expected completion of the Advanced Disposal
shareholder vote by the end of the third quarter of 2020. The
amendment to the definitive agreement also modifies certain closing
conditions and termination provisions, including an extension of
the deadline to complete the transaction and a $250 million
termination fee payable by Waste Management to Advanced Disposal if
the closing does not occur in certain circumstances when such
clearance has not been obtained.
Financing
Waste Management is well positioned to fund the transaction,
with its strong balance sheet, significant free cash flow
generation, investment grade credit rating and favorable access to
capital markets. As a result of the updated transaction timing,
Waste Management expects that its outstanding senior notes issued
in May 2019 with a special mandatory redemption feature will be
redeemed pursuant to their terms. This press release does not
constitute a notice of redemption under the indenture governing
such senior notes.
Waste Management currently anticipates funding the transaction
using a combination of credit facilities and commercial paper but
is evaluating other longer-term financing options. Following
completion of the acquisition, Waste Management expects to maintain
a strong balance sheet and solid investment grade credit profile
with a pro forma leverage ratio well within Waste Management’s
revolving credit facility financial covenant. Waste Management
currently has more $3 billion of available capacity under that
credit facility.
Asset Divestitures
In connection with the ongoing review of the transaction by the
U.S. Department of Justice, Waste Management and Advanced Disposal
entered into an agreement for GFL Environmental to acquire certain
assets. This divestiture transaction is also expected to close by
the end of the third quarter of 2020 and remains subject to
customary closing conditions including regulatory approval and the
closing of Waste Management’s acquisition of Advanced Disposal. The
agreement with GFL Environmental addresses substantially all of the
divestitures anticipated to be required by the U.S. Department of
Justice, but the U.S. Department of Justice has not yet approved
the transaction and continues its review in coordination with Waste
Management, Advanced Disposal, and GFL Environmental.
Advisors
Centerview Partners LLC is serving as exclusive financial
advisor to Waste Management, and Simpson Thacher & Bartlett LLP
and Vedder Price P.C. are serving as Waste Management’s legal
counsel. UBS Investment Bank is serving as exclusive financial
advisor to Advanced Disposal, and Shearman & Sterling LLP and
Mayer Brown LLP are serving as Advanced Disposal’s legal
counsel.
ABOUT WASTE MANAGEMENT
Waste Management, based in Houston, Texas, is the leading
provider of comprehensive waste management environmental services
in North America. Through its subsidiaries, Waste Management
provides collection, transfer, disposal services, and recycling and
resource recovery. It is also a leading developer, operator and
owner of landfill gas-to-energy facilities in the United States.
Waste Management’s customers include residential, commercial,
industrial, and municipal customers throughout North America. To
learn more information about Waste Management, visit www.wm.com or
www.thinkgreen.com.
ABOUT ADVANCED DISPOSAL
Advanced Disposal, based in Ponte Vedra, Florida, is the fourth
largest solid waste company in the U.S. and provides integrated,
non-hazardous solid waste collection, recycling and disposal
services to residential, commercial, industrial, and construction
customers across 16 states and the Bahamas. To learn more
information about Advanced Disposal, visit
www.AdvancedDisposal.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains “forward-looking statements” within
the meaning of the U.S. federal securities laws about Waste
Management, Advanced Disposal and the proposed acquisition and
divestitures, including but not limited to all statements about the
timing and approvals of the proposed acquisition and divestitures;
ability of the respective parties to consummate and finance the
acquisition and divestitures; method of financing the acquisition;
the amount or identity of required divestitures; integration of the
acquisition; future operations or benefits; future capital
allocation; future business and financial performance of Waste
Management and Advanced Disposal; future leverage ratio; future
redemption of senior notes; and all outcomes of the proposed
acquisition, including synergies, cost savings, and impact on
earnings, cash flow growth, return on capital, shareholder returns,
strength of the balance sheet and credit ratings, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Words such as “expect,” “likely,”
“outlook,” “forecast,” “preliminary,” “would,” “could,” “should,”
“can,” “will,” “project,” “intend,” “plan,” “goal,” “guidance,”
“target,” “continue,” “sustain, “ “synergy,” “on track,” “believe,”
“seek,” “estimate,” “anticipate,” “may,” “possible,” “assume,” and
variations of such words and similar expressions are intended to
identify such forward-looking statements. Potential investors,
stockholders, and other readers should view these statements with
caution and should not place undue reliance on such statements.
They are based on the facts and circumstances known to Waste
Management and Advanced Disposal (as the case may be) as of the
date the statements are made. These forward-looking statements are
subject to risks and uncertainties that could cause actual results
to be materially different from those set forth in such
forward-looking statements, including but not limited to, general
economic and capital markets conditions; public health risk and
other impacts of COVID-19 or similar pandemic conditions, including
increased costs, social and commercial disruption, service
reductions and other adverse effects on business, financial
condition, results of operations and cash flows; the effects that
the announcement of the merger amendment or pendency of the merger
may have on Waste Management, Advanced Disposal and their
respective business; inability to obtain required regulatory or
government approvals or to obtain such approvals on satisfactory
conditions; inability to obtain stockholder approval or satisfy
other closing conditions; inability to obtain financing; the
occurrence of any event, change or other circumstance that could
give rise to the termination of the definitive agreement; the
effects that any termination of the definitive agreement may have
on Advanced Disposal or its business; legal proceedings that may be
instituted related to the proposed acquisition; unexpected costs,
charges or expenses; failure to successfully integrate the
acquisition, realize anticipated synergies or obtain the results
anticipated; and other risks and uncertainties described in Waste
Management’s and Advanced Disposal’s filings with the SEC,
including Part I, Item 1A of each company’s most recently filed
Annual Report on Form 10-K and subsequent reports on Form 10-Q,
which are incorporated herein by reference, and in other documents
that Waste Management or Advanced Disposal file or furnish with the
SEC. Except to the extent required by law, neither Waste Management
nor Advanced Disposal assume any obligation to update any
forward-looking statement, including financial estimates and
forecasts, after it has been made, whether as a result of new
information, future events, circumstances or developments or
otherwise.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. This communication may be deemed to be
solicitation material in respect of the proposed merger between a
subsidiary of Waste Management and Advanced Disposal. In connection
with the proposed merger, Advanced Disposal plans to file a proxy
statement with the SEC in connection with, among other things, the
adoption of the amended definitive agreement. STOCKHOLDERS OF
ADVANCED DISPOSAL ARE URGED TO READ THE PROXY STATEMENT (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS
INCORPORATED BY REFERENCE THEREIN) AND OTHER RELEVANT DOCUMENTS IN
CONNECTION WITH THE PROPOSED TRANSACTION THAT ADVANCED DISPOSAL
WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND
THE PARTIES TO THE PROPOSED TRANSACTION. Stockholders and investors
will be able to obtain free copies of the proxy statement and other
relevant materials (when they become available) and other documents
filed by Advanced Disposal at the SEC’s website at www.sec.gov.
Copies of the proxy statement (when they become available) and the
filings that will be incorporated by reference therein may also be
obtained, without charge, by contacting Advanced Disposal’s
Investor Relations at investorrelations@advanceddisposal.com or
(904) 737-7900 or Waste Management's Investor Relations at
eegl@wm.com or (713) 265-1656.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Advanced Disposal and its respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from Advanced Disposal stockholders in connection with the
proposed merger. Information regarding Advanced Disposal’s
directors and executive officers is available in its Annual Report
on Form 10-K filed with the SEC on February 24, 2020. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement and other relevant materials to be filed with the SEC
(when they become available). These documents can be obtained free
of charge from the sources indicated in the above section entitled
“Additional Information and Where to Find It.”
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200624005438/en/
Waste Management
Web site https://www.wm.com
Analysts Ed Egl 713.265.1656 eegl@wm.com
Media Andy Izquierdo 832.710.5287 aizquierdo@wm.com
Advanced Disposal
Website https://www.advanceddisposal.com
Analysts & Media Matthew Nelson or Mark Nighbor
904.737.7900 matthew.nelson@advanceddisposal.com or
mark.nighbor@advanceddisposal.com
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