Waste Management to acquire Advanced Disposal

Waste Management to acquire Advanced Disposal

Advanced Disposal’s solid waste network includes 94 collection operations, 73 transfer stations, 41 landfills and 22 owned or operated recycling facilities.

Waste Management Inc., Houston, and Advanced Disposal Services Inc., Ponte Vedra, Florida, announced April 15 that they have entered into a definitive agreement under which a subsidiary of Waste Management will acquire all outstanding shares of Advanced Disposal for $33.15 per share in cash, representing a total enterprise value of $4.9 billion when including approximately $1.9 billion of Advanced Disposal’s net debt. The per share price represents a premium of 22.1 percent to Advanced Disposal’s closing share price as of April 12, the last trading day prior to the announcement, and a premium of 20.9 percent to Advanced Disposal’s 30-day volume weighted average price as of the same date.

According to Waste Management, this acquisition grows the company’s footprint and opens the door for the hauler to deliver waste and recycling services to Advanced Disposal’s network of customers.  With 2018 revenues of $1.56 billion, adjusted EBITDA of $427 million and approximately 6,000 employees, Advanced Disposal serves more than 3 million residential, commercial and industrial customers, including over 800 municipalities primarily in 16 states in the eastern half of the United States. Advanced Disposal’s solid waste network includes 94 collection operations, 73 transfer stations, 41 landfills and 22 owned or operated recycling facilities.

“At Waste Management, we focus on creating value for all stakeholders, delivering on our commitments to employees, customers, community partners, shareholders and the environment. The acquisition of Advanced Disposal extends these commitments by adding complementary assets and operations as well as a team with a shared focus on safety, outstanding service and operational excellence,” Waste Management CEO Jim Fish says. “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’s disciplined capital allocation and balance sheet strength position us well to execute upon this unique opportunity to expand our scale and capabilities to serve an even broader customer base and realize the strategic and financial benefits the acquisition of Advanced Disposal creates.”

“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,” Advanced Disposal CEO Richard Burke says. “This acquisition stands as a testament to the strength of the Advanced Disposal business and brings together two strong waste management teams with extensive environmental services expertise to better serve our customers and communities. We look forward to working with the Waste Management team to complete the transaction and ensure that we continue to deliver the highest quality service to our customers.”

Strategic and financial benefits

According to Waste Management, the acquisition advances the company’s growth strategy and aligns with the company’s financial goals, including growth in earnings per share, margins and cash flow. Specifically, Waste Management expects the addition of Advanced Disposal to:

  • Expand Waste Management’s footprint and customer base: According to the company, this acquisition brings a high-quality, complementary asset network and customer base under Waste Management’s management team, who the company says has a track record of operational excellence and a demonstrated ability to grow the margins and cash flows of the assets Waste Management has acquired.
  • Create significant synergies and grow waste management’s earnings and cash flows: Waste Management expects the transaction to generate more than $100 million in annual cost and capital expenditure synergies. The Advanced Disposal acquisition will be immediately accretive to Waste Management’s adjusted earnings per share and cash flow, with near-term benefits expected from core operating performance and SG&A cost savings. Incremental benefits from operating and capital efficiencies and network optimization will drive long-term margin expansion and improved free cash flow conversion, the company says.
  • Support Waste Management’s capital allocation priorities: Waste Management’s balance sheet and free cash flow generation position the company well to fund the acquisition, it says. In 2019, Waste Management’s free cash flow will be directed to dividend payments, acquisitions and share repurchases sufficient to offset dilution from stock-based compensation plans. The Advanced Disposal acquisition will enhance Waste Management’s cash flow growth and support its commitment to grow shareholder returns, according to the company. Waste Management currently expects to achieve targeted leverage and return to normal run-rate share repurchases within one year of the acquisition’s close.
  • Continue a commitment to customer service and sustainable waste solutions: The acquisition will join two teams of employees. Waste Management expects to continue making investments in employees, technology and capital equipment to further grow the business, and ensure reliable customer service while generating strong returns.


The transaction is not subject to a financing condition. Waste Management intends to finance the transaction using a combination of bank debt and senior notes.

Following completion of the transaction, Waste Management expects to maintain a strong balance sheet and solid investment grade credit profile with a pro forma leverage ratio within the company’s long-term targeted net debt-to-EBITDA range of 2.75x to 3.0x.

Timing and approvals

The transaction, which was unanimously approved by the boards of directors of both companies, is expected to close by the first quarter of 2020, subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by a majority of the holders of Advanced Disposal’s outstanding common shares.

In connection with the definitive agreement, the Toronto-based Canada Pension Plan Investment Board, which owns approximately 19 percent of Advanced Disposal’s outstanding shares, has, under the terms of a voting agreement, agreed to vote its shares in favor of the transaction.


Centerview Partners LLC, New York City, is serving as the exclusive financial advisor to Waste Management, and Simpson Thacher & Bartlett LLP, New York City, and Vedder Price P.C., Chicago, are serving as Waste Management’s legal counsel. UBS Investment Bank, Zurich, is serving as the exclusive financial advisor to Advanced Disposal, and Shearman & Sterling LLP, New York City, and Mayer Brown LLP, Chicago, are serving as Advanced Disposal’s legal counsel.