(Bloomberg) -- Waste Management Inc., North America’s largest waste recycling firm, agreed to buy medical-waste disposal company Stericycle Inc. for about $5.8 billion in cash.
Stericycle, based in Bannockburn, Illinois, provides medical waste and compliance services as well as secure information destruction services.
The deal marks one of the biggest acquisitions in the waste management sector, and will strengthen Waste Management’s position as the largest trash hauler in the US. The Houston-based company has bought several other disposal firms over the past few years, including Anderson Rubbish Disposal and Advanced Disposal.
Waste Management will pay $62 per share of Stericycle, it said in a statement Monday. That represents a 20% premium over Friday’s closing price of $51.54 a share.
Shares of Stericycle rose as much as 15% in New York, to $59.45, the highest level in more than two years. Waste Management fell as much as 2.8%, the biggest drop since July.
The transaction has an enterprise value of $7.2 billion, according to Waste Management. It’s expected to close as early as the fourth quarter, subject to regulatory approvals and the approval of Stericycle’s investors.
Bloomberg News had earlier reported that Stericycle was considering a potential sale after receiving takeover interest.
Centerview Partners LLC is Waste Management’s financial adviser on the deal, while Vinson & Elkins and Baker Botts are its legal counsel. BofA Securities is advising Stericycle and Latham & Watkins is the company’s legal counsel.
(Updates with share moves in fifth paragraph.)
©2024 Bloomberg L.P.