Fort Lauderdale, Fla.-based Republic Services has reached an agreement to acquire Phoenix-based Allied Waste. Under the terms of the all-stock transaction, estimated to be worth more than $6 billion, Allied stockholders will receive 0.45 Republic shares for each Allied share they own.
The deal, which combines the industry's second- and third-largest hauling firms, is expected to close in the fourth quarter, pending shareholder and regulatory approval. To complete the transaction, Republic will issue 198 million shares of common stock to Allied shareholders, establishing roughly 52 percent ownership of the combined company.
The combined company will be named Republic Services and will be headquartered in Phoenix.
Republic and Allied say the combined company will have annual revenues of more than $9 billion. The new company also will employ 35,000 workers and service more than 13 million customers in 40 states and Puerto Rico, according to Republic and Allied.
James O’Connor, chairman and CEO of Republic, will retain the same titles with the new company. Likewise, Allied’s president and COO Don Slager will keep his titles with the new company, as will Republic’s CFO Tod Holmes.
“By combining the strengths of two great companies and integrating executives from both teams, Republic will enhance its leadership position in the U.S. environmental services industry, building on both companies’ foundations of profitable growth,” said O’Connor in a press release.
“Our two companies have known and respected each other for many years, and the time is right for us to take the next logical step in the development of both companies, thus accelerating our ability to achieve our strategic objectives and enhancing our plan for profitable growth,” said John Zillmer, chairman and CEO of Allied, in a press release. Zillmer told Bloomberg.com that he and Allied CFO Peter Hathaway will leave when the deal closes.
In the latest Waste Age 100 ranking of the largest solid waste companies, Allied ranked second, with $6.07 billion in revenue in 2007. Republic ranked third, with $3.18 billion in revenue last year. Houston-based Waste Management topped the list with $13.31 billion in 2007 revenue. (The listing, which is in Waste Age's June issue, can be viewed here.)
The companies have set up a Web site detailing the acquisition at www.republicallied.com.