Mergers & Acquisitions

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>>> Waste Management struck a deal to buy medical-waste-disposal company Stericycle for roughly $5.8 billion.


The Wall Street Journal

by Lauren Thomas

6-3-24


https://www.msn.com/en-us/money/companies/waste-management-near-deal-to-buy-stericycle/ar-BB1nuPRd?OCID=ansmsnnews11


The details

Waste Management said Monday it would acquire Stericycle for $62 a share in cash. The deal also includes about $1.4 billion of Stericycle’s net debt.

The Wall Street Journal reported on the deal Sunday.

The rationale

Stericycle’s operations would complement Waste Management’s and give the bigger company a deeper foothold in the medical-waste-disposal sector, which enjoyed a sharp uptick in demand during the heights of the Covid-19 pandemic.

Waste Management is one of the biggest players in the U.S. trash business. The Houston company has the biggest landfill network in North America, numbering more than 250, according to its website.

Waste Management’s biggest revenue driver today is its collection operations, which pick up solid waste and recyclables from homes and businesses and transport them to landfills and other facilities. It operates a separate recycling unit that gives communities an alternative to landfill disposal and accounts for about 8% of total revenue.

Bannockburn, Ill.-based Stericycle specializes in collecting and disposing of hazardous medical waste. The company also runs a document shredding business, called Shred-It.

The context

Stericycle shares closed Friday at $51.54, giving the company a market value of about $4.8 billion. The stock jumped by about 15% when Bloomberg reported late last month that Stericycle had received unspecified takeover interest.

The deal would be a fairly small bite for Waste Management, which has a market value of almost $85 billion. Its stock is up about 18% so far this year as investors cheer the company’s recent efforts to boost profits.

The M&A market in the U.S. is showing signs of life after a couple of years in the doldrums, when high interest rates and other factors discouraged would-be dealmakers.

Last week, ConocoPhillips said it agreed to acquire Marathon Oil in an all-stock deal valued at $17.1 billion. T-Mobile US also agreed to buy much of U.S. Cellular’s operations in a transaction valued at roughly $4.4 billion including debt.

Centerview Partners advised Waste Management on the deal, while Stericycle was advised by Bank of America.

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