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Key Takeaways
- Waste Management has reached a deal to buy Stericycle, a medical waste disposal company, for $62 per share in cash.
- Waste Management will acquire Stericycle for approximately $7.2 billion, including about $1.4 billion of debt.
- Stericycle shares jumped about 15% higher Monday following the news, while Waste Management dropped 2%.
Waste Management (WM) has reached an agreement to acquire medical waste disposal company Stericycle (SRCL) in a deal valued at $7.2 billion including debt, sending the latter’s stock significantly higher Monday.
Waste Management will take on about $1.4 billion of Stericycle’s debt and pay $5.8 billion in cash at $62 per share, a 24% premium to its 60-day volume weighted average price as of May 23, the day before a Bloomberg report that Stericycle was considering a sale.
“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,” Stericycle Chief Executive Officer (CEO) Cindy Miller said.
“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.”
Waste Management Sees ‘More Than $125 Million’ in Annual Synergies
The acquisition will increase Waste Management’s capabilities in the medical waste sector, the companies said Monday, with the Houston-based WM projecting the deal will add “more than $125 million in annual run-rate synergies” and be accretive to its earnings and cash flow within a year of closing.
Pending regulatory approvals, the deal could close as soon as the fourth quarter of 2024.
Waste Management shares slipped 2.2% to $206.14 as of 10:10 a.m. ET Monday, while Stericycle shares jumped 15% to $59.26, their highest level in more than two years.