Republic Services, Allied Waste to Merge
Republic Services, Inc. of Fort Lauderdale, Fla., and Allied Waste Industries, Inc. of Phoenix on June 23 announced that their boards of directors have unanimously approved a merger agreement with expected pro forma annual revenues of approximately $9 billion and an expected total market capitalization of approximately $12 billion.
The combined company, which will retain the Republic Services name, will have more than 35,000 employees serving more than 13 million customers in 40 states and Puerto Rico. The transaction is expected to close by the fourth quarter of 2008, to generate approximately $150 million in net annual synergies, and to be accretive to Republic's earnings per share in the first year following completion of the merger. The new company will be based in Phoenix.
The merger will strengthen the national service platform of the companies and integrate the collection, transfer, recycling and disposal (landfill) operations. The transaction also will assemble a growing landfill gas-to-energy portfolio and significant untapped renewable energy resources.
"By combining the strengths of two great companies and integrating executives from both teams, Republic will enhance its leadership position in the U.S. environmental services industry, building on both companies' foundations of profitable growth," said James E. O'Connor, chair and chief executive officer of Republic.
John Zillmer, chair and chief executive officer of Allied, said, "Our two companies have known and respected each other for many years, and the time is right for us to take the next logical step in the development of both companies, thus accelerating our ability to achieve our strategic objectives and enhancing our plan for profitable growth."
Under the terms of the agreement, Allied shareholders will receive 0.45 shares of Republic common stock for each share of Allied common stock held.
On June 21, Republic Services announced that it planned to relocate the Fort Lauderdale offices to Sunrise, Fla., where a number of green initiatives are expected to be completed this summer.
The new building will be constructed with a number of "green" features that will enhance air quality and energy efficiency, including:
• Roof-top solar panels – 12 percent of the building's power will be supplied through solar energy panels.
• 30,000- gallon underground cistern will collect rainwater for watering the landscape and flushing toilets.
• High efficiency air conditioning and air handling units, including filters to ensure clean indoor air quality.
• Water saving, low-flow plumbing will be used throughout the building.
• Programs to recycle paper, plastic, aluminum, and containers (glass and tin) as well as batteries.
"Our efforts began in 2006 when we purchased an old building and decided to recycle as much of the building as possible rather than tearing it down," said O'Conner. "Ultimately, we saved more than 3,000 cubic yards of construction and demolition material from being landfilled."