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Waste Management Acquires Oakleaf Holdings for $425 Million

Houston-based Waste Management Inc. announced today that it has acquired Oakleaf Global Holdings and its primary operations for $425 million, subject to working capital and other adjustments. The deal merges North America’s largest network of directly owned hauling, recycling, diversion and disposal assets with the largest managed third-party network.

In 2010, the acquired operations of Windsor, Conn.-based Oakleaf generated approximately $580 million in revenues, according to a press release. The 650-employee firm provides outsourced waste and recycling services by facilitating a nationwide network of 2,500 hauling, recycling and waste diversion experts.

“No company operates in every market, making it hard for Waste Management to sell a super-regional waste contract,” says Michael Hoffman, director of research at Wunderlich Securities. “Using the brokerage model it has acquired from Oakleaf, it can do that.”

Hoffman adds that the acquisition also allows Waste Management to redirect a significant amount of waste to landfills it already owns. A lot of that waste, he notes, is likely material the company lost to Oakleaf’s business model in the first place.

“Acquiring Oakleaf advances our growth and transformation strategies of knowing more about our customers and how best to serve them, extracting more value from the material that we manage, and optimizing our operations,” said Waste Management CEO and President David P. Steiner, in a press release. “We substantially increase our national accounts customer base and further enhance our ability to provide comprehensive, best-in-class environmental solutions. In addition, Oakleaf’s vendor hauler network expands our service footprint to new geographies and enhances customers’ one-stop shopping for environmental solutions.”

“Importantly, Oakleaf’s vendor network expands our partnership with third-party service providers,” Steiner continued. “In many cases we can provide Oakleaf’s vendor haulers with opportunities to maintain and increase their business by utilizing our extensive post collection network. This will generate significant benefits for WM and for the vendor haulers.”

Steve Preston, president and CEO of Oakleaf, also commented in the press release: “We are pleased to be joining Waste Management, the undisputed leader in our industry with one of the most respected brands in the nation. WM has world-class products and services and we share WM’s clear vision about the future of our industry. Oakleaf brings a waste hauling, waste diversion and recycling vendor network along with a shared focus on customers. I am confident that our customers will benefit from WM’s material recovery strategies that provide customers with multiple options. Our vendor hauler partners will also benefit from the increased array of services that they can offer to their customers – enabling them to grow their businesses further. I look forward to joining the WM team to ensure a smooth transition.”

Waste Management says it expects a three to six month integration period following the transaction.

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