The end of the year often can be a slow time for news in any industry, but the final weeks of 2009 brought word of some significant mergers in the solid waste industry.
According to the terms of the agreement, Waste Service stockholders will receive 0.5833 shares of IESI-BFC stock for each Waste Service share they own. The combined company will be headed by Keith Carrigan, currently vice chairman and CEO of IESI-BFC, and will have more than 6,000 employees serving commercial, industrial and residential customers in the United States and Canada.
Combined revenue is expected to reach about $1.5 billion a year. The companies say the transaction should yield $25 million to $30 million in operational savings within two years of the merger's closing.
In the most recent Waste Age 100, which ranks the largest solid waste firms based on annual revenue and ran in the magazine's August 2009 issue, IESI-BFC came in at no. 7, with $1.05 billion in revenue in 2008. Waste Services was no. 14, with $473 million in revenue that year. Combined, the companies would have placed at no. 5 on the ranking.
"Through this combination, we will increase our internalization in the Canadian market, where we have demonstrated our ability to improve margins by applying our highly successful business model," Carrigan said in a press release. "We will also establish a meaningful presence in the Florida market, where WSI has initiated a vertical integration strategy centered around the JED Landfill [located in Osceola County], one of the most valuable solid waste assets in the state."
"We are very familiar with IESI-BFC, its management team, unique operating model, bottom-up management style, and industry leading record of organic growth," added David Sutherland-Yoest, president and CEO of Waste Services, in a press release. "The transaction with IESI-BFC will enable WSI to execute its operating and growth strategies more effectively and participate in the enhanced profitability of the combined entity, while continuing to provide our customers with the top-notch service they have come to expect."
J.P. Morgan Securities is the financial advisor to IESI-BFC on the deal, while CIBC World Markets is serving the same role to Waste Services.
All Star provides hauling, recycling and disposal services to more than 61,000 residential, commercial and industrial customers in the metropolitan Memphis, Tenn., area.
With $245.8 million in revenue in 2008, Advanced Disposal ranked no. 18 on the most recent Waste Age 100. All Star was no. 74 and brought in 12.1 million in revenue last year.
"Acquiring a successful and respected company like All Star Waste Systems is incredibly beneficial to us," said Advanced Disposal's Mid-South Area President Gerald Greene in a press release. "Our goal is to build upon the great reputation All Star has established and continue to provide our current and future customers with the most responsive and environmentally responsible solid waste and recycling services possible. We are excited about Advanced Disposal's expansion into the Tennessee marketplace and the additional opportunities it will provide throughout the state."
Hunter Caruthers, president of All Star, has become general manager of Advanced Disposal.