TORONTO-BASED BFI CANADA INC. is making some serious noise in the solid waste management industry. In November, the company announced it has reached an agreement to purchase the larger IESI Corp., Ft. Worth, Texas, for $1.1 billion (Canadian), or roughly $930 million (U.S.) based on exchange rates at the time of the announcement. The deal is expected to close by the end of January. In mid-December, BFI Canada was offering subscription receipts to raise $340 million (Canadian) in equity for the transaction.
While the companies could not comment on the deal at press time because of Canadian regulations regarding the subscription receipts, BFI Canada CEO and President Keith Carrigan has described the fit between the two companies as “excellent.” “We intend to improve operational efficiencies and profit margins by adopting the best practices of both companies, while pursuing growth both internally and through accretive acquisition opportunities that exist in Canada and the United States,” he said the day the acquisition was announced.
Carrigan will serve as president and CEO of the combined company, and Joseph Quarin, BFI Canada's chief financial officer, will remain in his current role. Mickey Flood will remain president and CEO of IESI, but also will become executive vice president of BFI Canada. Tom Cowee, IESI's senior vice president and chief financial officer, will keep his current titles and will become vice president of integration at the combined company.
BFI Canada is publicly traded on the Toronto Stock Exchange as BFI Canada Income Fund and has about 290,000 residential customers and 43,000 commercial and industrial customers. The company's accounts are in the provinces of British Columbia, Alberta, Manitoba, Ontario and Quebec. In 2003, the company had revenues of $167.6 million (Canadian), or roughly $125 million (U.S.)
IESI serves 560,000 residential customers and 56,000 commercial and industrial customers in the United States. The privately held firm is organized into a South Region, which oversees accounts in Arkansas, Louisiana, Missouri, Oklahoma and Texas; and a North Region, which contains accounts in Maryland, New York, New Jersey and Pennsylvania. IESI is ranked 16th in the most recent Waste Age 100 listing of private solid waste management companies in the United States. In 2003, the company had revenues of $256 million.
Flood founded IESI in 1995 when he purchased a two-truck solid waste operation. BFI Canada was created in 2000 after Scottsdale, Ariz.-based Allied Waste Industries Inc. bought Browning-Ferris Industries Ltd. (BFI) and sold its Canadian operations.