By Lisa Kerner
Charlotte, N.C., Nov. 11 - IESI-BFC Ltd. and Waste Services, Inc. announced they will combine to form North America's third-largest solid waste management company with expected pro forma annual revenues of approximately $1.5 billion.
Both companies' boards of directors approved the transaction, which is expected to close during the first quarter of 2010.
Waste Services shareholders will receive 0.5833 common shares of IESI-BFC for each Waste Services share held, according to a joint news release from the companies.
IESI-BFC said it will issue 27.8 million common shares, representing about 23% ownership in the combined company, and use a portion of its available credit capacity of $435 million as of Sept. 30. The company will also increase the size of its Canadian revolving credit facility to approximately C$450 million from C$305 million.
According to Waste Services and IESI-BFC, the combined company will use its excess free cash flow to "fund organic growth, maintain IESI-BFC's regular quarterly dividend payments to shareholders, finance accretive strategic acquisitions and reduce debt."
Waste Services said its largest shareholders, Westbury (Bermuda) Ltd. and Kelso & Co., LP, agreed to support the deal.
The merger agreement gives Waste Services, a Burlington, Ont.-based solid waste management services company, the right to nominate two members of the board of directors of the combined company.
Keith Carrigan, vice chairman and chief executive officer of IESI-BFC, will lead the combined company at its headquarters location in Toronto, the release said.
"We will maintain a strong balance sheet on closing, with pro forma debt-to-EBITDA of 2.70x, and expect this level to decline to below our stated 2.50x target within the first year following closing," Carrigan said in the release.
The combined company will trade under the symbol "BIN" on the New York Stock Exchange and the Toronto Stock Exchange.
IESI-BFC is a full-service waste management company.
J.P. Morgan Securities Inc. advised IESI-BFC on the transaction, and CIBC World Markets advised Waste Services.
| Acquirer: | IESI-BFC Ltd.
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| Target: | Waste Services, Inc.
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| Announcement date: | Nov. 11
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| Price per share: | 0.5833 shares of IESI-BFC
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| Expected closing: | First quarter of 2010
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| Stock price for acquirer: | NYSE: BIN: $13.31 on Nov. 10
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| Stock price for target: | Nasdaq: WSII: $7.24 on Nov. 10
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