Expands WM’s Comprehensive Environmental
Solutions in the Growing Healthcare Market While Advancing
WM’s Sustainability Commitments
- Provides a complementary business platform in the healthcare
market, a sector with attractive near- and long-term growth
dynamics
- Positions WM to offer customers the opportunity to partner with
a single service provider with a comprehensive suite of
environmental solutions
- Builds on WM’s sustainability commitments to help communities
thrive by offering customers a partner with leading, comprehensive
service offerings focused on promoting healthy and safe
communities
- Leverages WM’s expertise in logistics and technology-enabled
cost optimization, as well as its leading waste disposal network to
deliver more than $125 million of projected annual synergies
- Synergy realization expected to result in a post-synergy
transaction multiple well below WM's current trading multiple
- Expected to be accretive to WM’s earnings and cash flow within
one year of close
- Both WM and Stericycle remain confident in the strength of
their businesses and expect to achieve previously announced
full-year guidance, excluding the impacts of any
transaction-related costs
Waste Management, Inc. (NYSE: WM) and Stericycle (NASDAQ: SRCL)
announced today that they have entered into a definitive agreement
under which WM will acquire all outstanding shares of Stericycle
for $62.00 per share in cash, representing a total enterprise value
of approximately $7.2 billion when including approximately $1.4
billion of Stericycle’s net debt. The per share price represents a
premium of 24% to Stericycle’s 60-day volume weighted average price
as of May 23, 2024, which was the last trading day before an
article reported that Stericycle was considering a potential
sale.
Stericycle is a premier provider of regulated medical waste and
compliance services as well as secure information destruction
services.
“At WM, we are committed to maximizing value for all our
stakeholders by providing a comprehensive suite of environmental
solutions to the market. The acquisition of Stericycle is a
significant step in advancing this commitment because it broadens
the scope of our service offerings, bringing together the leader in
solid waste and a premier company in regulated medical waste
services,” said Jim Fish, President and Chief Executive Officer of
WM. “We have a proven track record of integrating and optimizing
acquired businesses that benefit our customers and employees and
deliver a strong return on investment for our shareholders. We look
forward to working with the Stericycle team to capture the
strategic, customer service, environmental, and financial benefits
of this acquisition.”
“Our sustained focus and commitment to transforming our business
over the past five years has uniquely positioned Stericycle for
this transaction, which creates significant value for shareholders,
unlocks new opportunities to deliver diversified services to
customers, and supports investment in the growth and development of
our team members,” said Cindy J. Miller, Stericycle’s President and
Chief Executive Officer. “As customers seek to manage a greater
volume and variety of materials in a safe, responsible, and
sustainable way, Stericycle’s knowledge and expertise in regulated
medical waste and secure information destruction are compelling
additions to WM’s broad portfolio of environmental solutions. We
are proud of all that we’ve accomplished to shape a healthier and
safer world and look forward to our future as part of WM.”
Compelling Strategic and Financial Benefits
The acquisition advances WM’s growth strategy, underscores the
importance of executing on its sustainability initiatives, and
aligns with the Company’s financial goals, including growth in
operating EBITDA and cash flow. Specifically, WM expects the
addition of Stericycle to:
- Expand WM’s already extensive environmental service
offerings. The acquisition of Stericycle adds a leading
platform of differentiated assets in the attractive medical waste
and secure information destruction industries to WM’s suite of
environmental solutions. Given the growth outlook for healthcare
services in North America, WM expects this business to deliver
revenue growth that surpasses the strong fundamentals of its core
solid waste business.
- Continue its commitment to comprehensive, sustainable waste
solutions. This acquisition allows WM to further its
unparalleled investment in growing North America’s recycling
infrastructure and enhance the environmental value of Stericycle’s
secure information destruction business.
- Strengthen the foundation for sustainable long-term growth
as a comprehensive service provider. The acquisition will bring
together talented and dedicated employees who are passionate about
managing the environmental needs of customers and communities with
outstanding service and a commitment to safety. Integrating
Stericycle into WM adds a top-tier operator in the healthcare and
secure information destruction sectors – providing customers the
option of partnering with a single, trusted provider known for
safety, compliance and environmental stewardship to solve their
diverse waste management needs.
- Create significant synergies and grow WM’s earnings and cash
flows. WM expects the transaction to generate more than $125
million in annual run-rate synergies. These synergy opportunities
are driven by WM’s logistics expertise, its track record of using
technology to optimize operating and SG&A costs, and its
industry-leading disposal asset network. The Stericycle acquisition
is expected to be accretive to WM’s earnings and cash flows within
one year of close.
- Support WM’s capital allocation priorities. WM’s strong
balance sheet and significant cash flow generation position it well
to fund the acquisition. In 2024, WM’s operating cash flow will
continue to be directed to organic growth investments in WM’s
recycling and renewable energy businesses, capital expenditures to
support its base business, dividend payments, and acquisitions. The
Stericycle acquisition will enhance WM’s cash flow growth and
support its commitment to grow shareholder returns. WM currently
expects to achieve targeted leverage and return to normal run-rate
share repurchases within 18 months of the acquisition’s close.
Financing
The transaction is not subject to a financing condition. WM
intends to finance the transaction using a combination of bank debt
and senior notes.
In the near term, following completion of the transaction, WM
expects a net debt-to-EBITDA ratio of approximately 3.4x. The
Company has a long-standing commitment to a strong balance sheet
and solid investment grade credit profile and expects its prudent
approach to capital allocation, including a temporary suspension of
share repurchases, to position it to achieve a leverage ratio
within its targeted net debt-to-EBITDA range of 2.75x to 3.0x
approximately 18 months after closing the transaction.
Timing and Approvals
The transaction, which was unanimously approved by the boards of
directors of both companies, is expected to close as early as the
fourth quarter of 2024, subject to the satisfaction of customary
closing conditions, including regulatory approvals and approval by
a majority of the holders of Stericycle’s outstanding common
shares.
Advisors
Centerview Partners LLC is serving as exclusive financial
advisor to WM, and Vinson & Elkins L.L.P. and Baker Botts
L.L.P. are serving as WM’s legal counsel. BofA Securities is
serving as exclusive financial advisor to Stericycle, and Latham
& Watkins LLP is serving as Stericycle’s legal counsel.
ABOUT WM
WM (WM.com) is North America's leading provider of comprehensive
environmental solutions. Previously known as Waste Management and
based in Houston, Texas, WM is driven by commitments to put people
first and achieve success with integrity. The company, through its
subsidiaries, provides collection, recycling and disposal services
to millions of residential, commercial, industrial and municipal
customers throughout the U.S. and Canada. With innovative
infrastructure and capabilities in recycling, organics and
renewable energy, WM provides environmental solutions to and
collaborates with its customers in helping them achieve their
sustainability goals. WM has the largest disposal network and
collection fleet in North America, is the largest recycler of
post-consumer materials and is the leader in beneficial use of
landfill gas, with a growing network of renewable natural gas
plants and the most landfill gas-to-electricity plants in North
America. WM's fleet includes more than 12,000 natural gas trucks –
the largest heavy-duty natural gas truck fleet of its kind in North
America. To learn more about WM and the company's sustainability
progress and solutions, visit Sustainability.WM.com.
ABOUT STERICYCLE
Stericycle is a U.S. based business-to-business services company
and a leading provider of compliance-based solutions that protect
people and brands, promote health and well-being and safeguard the
environment. Stericycle serves customers in North America and
Europe with solutions for regulated waste and compliance services
and secure information destruction. For more information about
Stericycle, please visit Stericycle.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains “forward-looking statements” within
the meaning of the U.S. federal securities laws about WM,
Stericycle and the proposed acquisition, including but not limited
to all statements about the timing and approvals of the proposed
acquisition; ability to consummate and finance the acquisition;
method of financing the acquisition; integration of the
acquisition; future operations or benefits; future capital
allocation; future business and financial performance of WM and
Stericycle and the ability to achieve full year financial guidance;
future leverage ratio; future share repurchases; and all outcomes
of the proposed acquisition, including synergies, cost savings, and
impact on earnings, cash flow growth, return on capital,
shareholder returns, and strength of the balance sheet, which are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Words such as “expect,”
“likely,” “outlook,” “forecast,” “preliminary,” “would,” “could,”
“should,” “can,” “will,” “project,” “intend,” “plan,” “goal,”
“guidance,” “target,” “continue,” “sustain, “ “synergy,” “on
track,” “believe,” “seek,” “estimate,” “anticipate,” “may,”
“possible,” “assume,” and variations of such words and similar
expressions are intended to identify such forward-looking
statements. You should view these statements with caution and
should not place undue reliance on such statements. They are based
on the facts and circumstances known to WM and Stericycle (as the
case may be) as of the date the statements are made. These
forward-looking statements are subject to risks and uncertainties
that could cause actual results to be materially different from
those set forth in such forward-looking statements, including but
not limited to, general economic and capital market conditions;
global geopolitical conditions, including increased costs, social
and commercial disruption, service reductions and other adverse
effects on business, financial condition, results of operations and
cash flows; the effects that the announcement or pendency of the
merger may have on WM, Stericycle, their respective business and
their ability to retain and hire key personnel and maintain
relationships with customers, suppliers and others with whom they
do business; inability to obtain required regulatory or government
approvals or to obtain such approvals on satisfactory conditions;
inability to obtain stockholder approval or satisfy other closing
conditions; inability to obtain financing; the occurrence of any
event, change or other circumstance that could give rise to the
termination of the definitive agreement; the effects that any
termination of the definitive agreement may have on Stericycle or
its business; legal proceedings that may be instituted related to
the proposed acquisition; significant and unexpected costs, charges
or expenses related to the proposed acquisition; failure to
successfully integrate the acquisition, realize anticipated
synergies or obtain the results anticipated; and other risks and
uncertainties described in WM’s and Stericycle’s filings with the
SEC, including Part I, Item 1A of each company’s most recently
filed Annual Report on Form 10-K, and subsequent reports on From
10-Q, which are incorporated herein by reference, and in other
documents that WM or Stericycle file or furnish with the SEC.
Except to the extent required by law, neither WM nor Stericycle
assume any obligation to update any forward-looking statement,
including financial estimates and forecasts, whether as a result of
new information, future events, circumstances or developments or
otherwise.
NON-GAAP FINANCIAL MEASURES
For purposes of the pro forma leverage ratio, all terms used in
that calculation, including EBITDA, are defined in WM’s Revolving
Credit Agreement filed with the SEC on Form 8-K on May 8, 2024.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. This communication may be deemed to be
solicitation material in respect of the proposed merger between a
subsidiary of WM and Stericycle. Stericycle intends to file with
the SEC a proxy statement and other relevant documents in
connection with a special meeting of the Stericycle stockholders
for purposes of obtaining stockholder approval of the proposed
transaction. The definitive proxy statement will be sent or given
to Stericycle stockholders and will contain important information
about the contemplated transaction. INVESTORS AND STOCKHOLDERS OF
Stericycle ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND
OTHER RELEVANT MATERIALS FILED WITH THE SEC CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT STERICYCLE AND THE PROPOSED
TRANSACTION. Investors and stockholders may obtain a free copy of
the proxy statement (when it is available) and other documents
filed with the SEC at the SEC’s website at www.sec.gov or from
Stericycle at its website at investors.Stericycle.com.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Stericycle and its respective directors, executive officers and
other members of management and employees may be deemed to be
participants in the solicitation of proxies from Stericycle
stockholders in connection with the contemplated transaction.
Information regarding the persons who may, under the rules of the
SEC, be considered to be participants in the solicitation of
Stericycle’s stockholders in connection with the proposed
transaction will be set forth in Stericycle’s definitive proxy
statement for its stockholder meeting at which the proposed
transaction will be submitted for approval by Stericycle’s
stockholders. You may also find additional information about
Stericycle’s directors and executive officers in Stericycle’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2023, which was filed with the SEC on February 28, 2024, in
Stericycle’s proxy statement for its 2024 Annual Meeting of
Stockholders, which was filed with the SEC on April 5, 2024, and in
subsequently filed Current Reports on Form 8-K and Quarterly
Reports on Form 10-Q.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240602670467/en/
WM
Website www.wm.com
Analysts Ed Egl 713.265.1656 eegl@wm.com
Media Toni Werner media@wm.com
Stericycle
Website investors.stericycle.com
Analysts 847.607.2012 stericycleIR@stericycle.com
Media 847.964.2288 media@stericycle.com
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