Waste Management (WM) has announced its acquisition of Stericycle, a leader in medical waste services, for a total of $7.2 billion. This move is aimed at expanding WM’s environmental solutions in the growing healthcare market and advancing its sustainability commitments.
The acquisition provides WM with a complementary business platform in the healthcare market, which is noted for its attractive near* and long-term growth dynamics. It also positions WM to offer customers a comprehensive suite of environmental solutions as a single service provider.
WM expects to realize more than $125 million in annual synergies from the acquisition, leveraging its expertise in logistics and technology-enabled cost optimization, as well as its leading waste disposal network. The company anticipates that the synergy realization will result in a post-synergy transaction multiple well below WM’s current trading multiple.
The acquisition is expected to be accretive to WM’s earnings and cash flow within one year of the close of the transaction. Both WM and Stericycle remain confident in the strength of their businesses and expect to achieve previously announced full-year guidance, excluding the impacts of any transaction-related costs. As a result of these announcements, the company's shares have moved 14.7% on the market, and are now trading at a price of $59.1. If you want to know more, read the company's complete 8-K report here.
