The transaction is expected to close by the first quarter of 2020 and Waste Management plans to finance the deal through a combination of bank debt and senior notes. The acquisition is expected to create over $100 million in annual cost and capital expenditure synergies, and is expected to be immediately accretive to Waste Management’s adjusted EPS and cash flow.
The deal will help Waste Management in expanding its footprint and customer base while also enhancing cash flow growth. The company plans to use its free cash flow for dividend payments, acquisitions and share repurchases in 2019.
Both companies expect to achieve their previously provided full-year guidance, excluding transaction-related considerations. Waste Management will announce its first quarter 2019 results on April 25.
Waste Management’s stock has gained over 18% thus far this year while Advanced Disposal’s shares have climbed over 37%.