Houston-based industry giant Waste Management, Inc. announced Wednesday that it had agreed with Advanced Disposal Services Inc. to adjust the price of their proposed merger from $4.9 billion to $4.6 billion.
The two companies also agreed to sell an estimated $835 million in assets to a Canadian waste removal firm as part of a divestiture agreement designed to secure antitrust clearance for their massive merger from the Department of Justice.
The merger, first announced in April 2019, had been seen as one of the most prominent casualties of the COVID-19 pandemic when it failed to close as anticipated during the first quarter of 2020. As part of the new agreement, Waste Management and Advanced Disposal agreed to a new walkaway date of September 30, 2020 with a pre-approved postponement to November 30 if DOJ antitrust approval is still in process.
Simpson Thacher counseled Waste Management on the revised agreement, including seven lawyers from the firm’s Houston office: M&A partner Chris May and associates Jacqui Bogucki, Nate Bascom, Hunter Hampton, and Braxton Pitts (M&A), along with capital markets partner Brian Rosenzweig and associate Brian Mathes.
Vedder Price is also advising Waste Management, while Centerview Partners is their exclusive financial advisor. UBS Investment Bank is serving as exclusive financial advisor to Advanced Disposal, and Shearman & Sterling LLP and Mayer Brown LLP are serving as Advanced Disposal’s legal counsel.
Under terms of the new agreement, Waste Management will acquire Advanced Disposal for $30.30 per share in cash, reducing the price of the original agreement of $33.15. The $4.6 billion value of the new agreement includes the assumption of approximately $1.8 billion debt, slightly less than the estimated $1.9 billion debt assumption that was part of the original agreement.
As part of the new agreement, the companies also announced that Canada-based GFL Environmental has agreed to acquire a combination of Advanced Disposal and Waste Management assets for $835 million. At least $300 million of those assets represent anticipated divestures required for federal approval of the deal.
Waste Management is the largest solid waste company in the U.S. Advanced Disposal, based in Ponte Vedra, Florida, is the fourth largest.