Advanced Disposal Shares Fall After Waste Management Deal

Advanced Disposal Services shares are down after the company agreed to be acquired by Waste Management for $30.30 a share.

Advanced Disposal Services  (ADSW) - Get Report shares were lower as the solid-waste-disposal company agreed to be acquired by Waste Management  (WM) - Get Report in a revised deal valued at $30.30 a share, or $4.6 billion.

Shares of the Ponte Vedra, Fla., company at last check were off 3.4% to $30.11, while Houston-based Waste Management was up nearly 1% to $104.75.

The agreed deal price is lower than Advanced Disposal's Tuesday closing price of $31.16.

The acquisition includes about $1.8 billion of Advanced Disposal’s net debt.

Meanwhile, the companies unveiled a definitive agreement by which GFL Environmental  (GFL) - Get Report, the Toronto waste-management company, will buy a combination of Advanced Disposal and Waste Management assets for $835 million. 

The move is designed to satisfy divestitures expected to be required by the U.S. Department of Justice.

Subject to conditions including regulatory clearances and a vote of holders of Advanced Disposal, the deal should close by the end of the third quarter, the companies said. 

The two companies first announced the acquisition in April 2019. At the time the deal called for Waste Management to pay $33.15 a share cash for Advanced Disposal. 

"[The] revised agreement with Waste Management, coupled with our joint agreement to sell substantially all of the divestitures to GFL Environmental, delivers significant value and certainty of closing to Advanced Disposal stockholders," Richard Burke, ADSW's chief executive, said in a statement.

Advanced Disposal serves about 2.8 million residential customers and 200,000 commercial customers in around 16 states and the Bahamas.

The transaction merges the No. 1 and No. 4 companies in the sector and would rank as one of the biggest solid-waste-company acquisitions in more than a decade.

Waste Management said it expected annual cost and capital-expenditure synergies to exceed the $100 million that was previously announced.