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Big Merger Announced in Solid Waste Field
Texas-based Waste Connections, Inc. and Toronto-based Progressive Waste Solutions Ltd. announced Jan. 19 that they are merging in an all-stock transaction valued at about $2.67 billion. The combined company will bear the Waste Connections name.
Progressive Waste also announced several executive suite changes connected to the proposed merger: Executive Vice President, Strategy and Business Development Dan Pio has been appointed Chief Integration Officer; Bill Herman, Vice President and Chief Accounting Officer, has been appointed Executive Vice President and Interim Chief Financial Officer; and Loreto Grimaldi, Senior Vice President, General Counsel and Secretary, has been appointed Executive Vice President and Chief Legal Officer. The company's executive vice president and COO, Kevin Walbridge, and CFO Ian Kidson have stepped down.
Waste Connections' shareholders will own approximately 70 percent of the combined company, and Waste Connections will have a majority of the seats on the combined company's board of directors. The transaction has been unanimously approved by both companies' boards and is expected to close in the second quarter of 2016.
"We are extremely excited to welcome Progressive Waste into the Waste Connections family and believe the combination will be quite compelling to our collective employees, shareholders, and other stakeholders," said Ronald J. Mittelstaedt, CEO and chairman of Waste Connections. "Under our leadership, we believe we can instill the corporate culture, safety focus, operational excellence, and accountability that have served us so well and which we believe are necessary for long-term success within Progressive Waste's complementary markets. These improvements, together with expected immediate synergies and other cash flow benefits, should accelerate value creation for both companies' shareholders. In addition, to maintain our strategic market differentiation and drive further value creation, we expect to either divest or swap assets within certain U.S. markets as we believe between 85 percent and 90 percent of Progressive Waste's revenue is consistent with our differentiated tenets. Put simply, we believe this combination creates a company uniquely positioned with industry-leading operating and free cash flow margins, together with the balance sheet strength, to drive further growth and increase the return of capital to our shareholders."
"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 CEO of Progressive Waste. "We believe this combination will accelerate the improvements already under way, building upon our fourth quarter financial and operational performance. Importantly, employees will benefit from new opportunities for growth and development as part of a larger company committed to customer service, operational excellence, safety and employee engagement. We look forward to a bright future for our employees and enhanced service for our customers as a result of this transaction."
Waste Connections provides solid waste collection, transfer, disposal, and recycling services in mostly exclusive and secondary markets and, through its R360 Environmental Solutions subsidiary, is a leading provider of non-hazardous oilfield waste treatment, recovery, and disposal services. Progressive Waste serves more than 4 million North American customers, mainly in urban markets, is a leader in landfill gas-to-energy technology, and employs more than 8,000 people in the United States and Canada.