Waste Management, Inc. (WM) entered into a definitive agreement on June 3, 2024, to acquire medical waste disposal company Stericycle Inc. (SRCL) for $7.2 billion, including debt, as it looks to tap into the growing healthcare waste disposal market in the United States.
As per the terms outlined in the agreement, Waste Management will acquire all outstanding shares of Stericycle for $62.00 per share in cash, representing a premium of 20.29% from the stock’s last close.
WM is North America’s leading provider of comprehensive environmental solutions, specializing in waste collection, recycling, disposal, and renewable energy. It is acquiring Stericycle, which helps local clinics, surgery centers, and hospitals dispose of their biohazardous and pharmaceutical waste.
Stericycle had started weighing options for a potential sale late last month, according to Bloomberg. Stericycle’s current EV/EBITDA (TTM) ratio is 16.42, above the sector median of 13.08.
The deal, which includes $1.4 billion of Stericycle’s debt, is expected to close as early as the fourth quarter of 2024.
Waste Management, which dominates the garbage collection space in the United States, expects that the transaction will generate more than $125 million in annual run-rate synergies, and will be accretive to its earnings and cash flows within one year of close.
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Deal Metrics for the Acquisition of Stericycle Inc. (SRCL) by Waste Management, Inc. (WM)
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Editor’s Note: Baranjot Kaur contributed to this article