Advanced Disposal Services announced that it is postponing its IPO as a result of “unfavorable equity market conditions.”
The announcement comes less than 10 days after the firm had announced the launch of the offering. It planned to offer 9,037,033 shares of common stock and the selling stockholder is offering 12,391,538 shares of common stock.
“Although solid waste is a relatively desirable area right now in the investment community, it is just tough sledding for any IPO in this volatile market,” says Leone Young, principal of LTY ERC, LLC, an environmental services industry consultancy.
The IPO is aimed to pay down debt. Advanced is owned by private equity firm Highstar Capital, which is likely attempting to monetize its position.
As Stifel analyst Michael E. Hoffman told Waste360 in November, “We believe they have time-line milestones to hit when they start monetizing that portfolio; otherwise, ownership begins to accrue to Oak Tree. I think there’s a little bit of, if you’re going to the public market, you’ve got to start that process sooner or later in order to create an orderly exit.”
Despite the IPO delay, the firm has remained busy on other fronts. Last week it acquired waste hauler FDS Disposal LLC for an undisclosed amount. That came after the firm completed more than a dozen acquisitions in 2015.
The firm also recently made some changes to its board of directors. Sergio Pedreiro was appointed to the board of directors while both Wilson Quintella Filho and Charles C. Appleby resigned as part of the firm’s plans to go public.
Advanced Disposal is not alone among companies that have postponed IPOs. Airport restaurant operator OTG EXP Inc. announced it was delaying its offering on Tuesday. Other companies that have put off IPOs this year include grocer Albertsons Companies, broadcast firm Univision Communications and department store chain Neiman Marcus Group.
The company originally filed for an offering last August. (Leong Young analyzed those plans in her Waste360 Business Insights column in September.)