Progressive Waste enters into merger agreement with Waste Connections

Progressive Waste Solutions (BIN) has announced it will merge with Waste Connections Inc. in an all-stock deal, with the combined companies to operate out of a headquarters in Canada, reports The Wall Street Journal.

Once the deal goes through, Waste Connections stockholders will own about 70% of the combined company, with Progressive Waste shareholders taking the remaining 30%.

Progressive Waste Solutions Waste Connections

Progressive Waste enters into merger agreement with Waste Connections

The transaction will take the form of a reverse merger, with Texas-based Waste Connections buying Toronto-based Progressive Waste Solutions with a mind to set up shop in Canada, thus avoiding a higher U.S. tax rate.

The deal, valued at about $2.7 billion on the basis of Friday’s closing price of $24.55 for each Progressive Waste share, will mean that the Progressive Waste Solutions name becomes redundant, with the combined companies adopting the Waste Connections name.

The prevailing company is expected to trade on the New York Stock Exchange and the Toronto Stock Exchange.

In announcing the merger, Progressive said that chief operating officer Kevin Walbridge and chief financial officer Ian Kidson had both stepped aside, with Dan Pio, executive vice president of strategy and business development, assuming the position of chief integration officer. Meanwhile, William Herman, vice president and chief accounting officer, was named chief financial officer.

The deal coincides with Progressive shares being at their lowest price for two years. In contrast, Waste Connections has been on steady incline since 2009, with shares more than tripling in price in that period.

“Combining Progressive Waste and Waste Connections makes compelling strategic and financial sense, and the all-stock nature of the transaction provides Progressive Waste shareholders with the opportunity to participate in the significant near- and long-term upside potential of the combination,” said Joseph Quarin, president and chief executive officer of Progressive Waste.

Progressive Waste Solutions Ltd. is a Concord, Ontario based waste management company. The Company provides non-hazardous solid waste collection, recycling and disposal services to commercial, industrial, municipal and residential customers in approximately 13 United States and the District of Columbia and six Canadian provinces. The Company conducts its business through three geographic regions: the East, West and North regions. The Company’s East region includes Florida, New York, New Jersey, Pennsylvania, Maryland, Virginia and the District of Columbia. The West region includes Texas, Louisiana, Oklahoma, Arkansas, Mississippi, Missouri and Illinois. The North region includes the Canadian provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Quebec. More from Reuters »

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Progressive Waste Solutions Ltd. begins talks over sale

Progressive Waste Solutions Ltd. (TSE:BIN, Mkt cap 3.78B, P/E 28.49, Div/yield 0.17/1.96, EPS 1.22, Shares 108.79M) has begun preliminary talks with financial advisers about potentially selling the company, Bloomberg reports.

The Ontario-based garbage company is already believed to have reached out to potential buyers, according to unnamed sources familiar with the matter.

Progressive Waste Solutions sale

Progressive Waste Solutions Ltd. begins talks over sale

Progressive Waste, which serves more than four million customers in Canada and the U.S., may eventually decide against pursuing a sale, the informed people stressed. In fact, advisers may find it heavy going to find a buyer among garbage companies because they are typically reluctant to make such a large acquisition, one of the individuals told Bloomberg.

On Tuesday, the company confirmed that it had started a review of strategic alternatives and that JPMorgan Chase & Co. will remain its financial adviser.

Bloomberg notes that Progressive Waste has declined about 22% in the last 12 months in New York trading, while on the Canadian exchange it has dipped by around 8%.

Meanwhile, in October, the company lowered its 2015 earnings forecast to somewhere in the region of $480 million to $485 million from $500 million to $515 million. This was attributed to higher-than-expected labor, repair and maintenance costs in its West region.

There was a surge in global mergers and acquisitions in 2015, totalling a record $3.8 trillion, with the environmental control industry – which includes waste management and recycling firms – shown to have played a part in the record figure.

The industry accounted for $21 billion of the record amount last year, which represents a 40% increase on 2014 – just shy of the peak in 2006, according to Bloomberg’s figures.

Progressive Waste Solutions Ltd. is a Concord, Ontario based waste management company. The Company provides non-hazardous solid waste collection, recycling and disposal services to commercial, industrial, municipal and residential customers in approximately 13 United States and the District of Columbia and six Canadian provinces. The Company conducts its business through three geographic regions: the East, West and North regions. The Company’s East region includes Florida, New York, New Jersey, Pennsylvania, Maryland, Virginia and the District of Columbia. The West region includes Texas, Louisiana, Oklahoma, Arkansas, Mississippi, Missouri and Illinois. The North region includes the Canadian provinces of British Columbia, Alberta, Manitoba, Saskatchewan, Ontario and Quebec. More from Reuters »

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.