WM Waste Management

By Allison Prang and Cara Lombardo 

Waste Management Inc. is buying competitor Advanced Disposal Services Inc. for around $2.9 billion in one of the biggest solid-waste company acquisitions in more than a decade.

The companies said the offer of $33.15 a share comes out to a premium for Advanced Disposal shareholders of 22.1% based on the company's closing price Friday. Shares most recently closed at $27.14 a share.

The deal brings together the No. 1 and No. 4 companies in the sector and is Waste Management's biggest acquisition ever.

The Wall Street Journal reported over the weekend that the companies were nearing a deal and that it could be announced Monday.

The companies said the enterprise value of the deal is $4.9 billion. That includes about $1.9 billion of net debt from Advanced Disposal, they said.

The deal is expected to be immediately accretive to both Waste Management's cash flow and adjusted earnings, the companies said.

Advanced Disposal, a waste and recycling collector based in Ponte Vedra, Fla., had $1.56 billion in revenue in 2018. The company works in the eastern part of the U.S., mainly in 16 states. It serves roughly 2.8 million residential customers and 200,000 commercial customers, and it owns or operates around 60 landfills and recycling centers.

Advanced Disposal went public in 2016 and is part-owned by the Canada Pension Plan Investment Board, which, according to Refinitiv, owns around 19% of the company.

Houston-based Waste Management is the largest solid-waste company in the U.S., with a market value of more than $40 billion. It owns or operates roughly 250 landfills, the largest network in the country.

The deal broadens Waste Management's geographic footprint, adding attractive regions in the waste collection and landfill segments in states like Minnesota, Illinois, Wisconsin and Indiana.

Waste Management last year spent more than $450 million on acquisitions, and Chief Executive James Fish said on a recent earnings call that it planned to continue spending on deals in 2019.

Last month, a Waste Management subsidiary announced the acquisition of Petro Waste Environmental, which provides environmental services and solid-waste disposal to the oil-and-gas industry.

The companies said the deal is expected to close by the first quarter of 2020.

Write to Allison Prang at allison.prang@wsj.com

(END) Dow Jones Newswires

April 15, 2019 07:18 ET (11:18 GMT)

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