Categories Industrials

Waste Management’s stock gains on news of Advanced Disposal acquisition

Waste Management Inc.’s (WM) stock was up 2.5% in afternoon trade on Monday after the company announced its decision to acquire Advanced Disposal Services Inc. (ADSW) for $33.15 per share in cash, or a total value of $4.9 billion, including Advanced Disposal’s net debt. Advanced Disposal’s stock was up 18.7%.

The $33.15 price reflects a 22% premium to Advanced Disposal’s closing share price as of Friday. Advanced Disposal serves over 3 million customers and earned revenues of $1.56 billion in 2018.

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%.

 

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.

Most Popular

Should investors worry about Micron’s (MU) weak Q4 results and guidance?

The semiconductor industry is a rapidly growing business segment that currently thrives on the digital transformation wave. The demand for memory chips and other semiconductor products increased over the years,

What has Bed Bath & Beyond (BBBY) outlined for this fiscal year?

Shares of Bed Bath & Beyond (NASDAQ: BBBY) were up on Friday, a day after the company delivered disappointing results for the second quarter of 2022. The company reported a

NKE Earnings: Highlights of Nike’s Q1 2023 results

Nike, Inc. (NYSE: NKE) has reported a decrease in net profit for the first quarter of 2023, despite a modest increase in revenues. The company's stock suffered a big loss

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top