Trash collection and recycling giant Waste Management (WM) is buying Stericycle (SRCL) in a deal valued at $7.2 billion U.S.
Stericycle specializes in collecting and disposing of medical and pharmaceutical waste.
Specifically, Stericycle helps clinics, surgery centres, and hospitals dispose of their biohazardous and medication waste.
Waste Management says it wants to gain more share in the fast-growing healthcare waste disposal market.
Under terms of the deal, Waste Management is offering $62 U.S. per share for Stericycle. That represents a 20% premium to Stericycle’s current stock price of $51.57 U.S. per share.
In a joint news release, the companies said that the deal is expected to close by year’s end and will generate more than $125 million U.S. in annual cost savings.
Headquartered in Houston, Texas, Waste Management recycles trash into clean and renewable energy throughout the U.S. and Canada.
The company beat analysts' estimates for its first quarter profit this year due to higher prices and growing demand for garbage collection from residences in the U.S.
Before today (June 3), the stock of Waste Management had increased 28% over the last 12 months to trade at $210.73 U.S. per share.
The stock of Stericycle had gained 18% over the past year prior to news of the Waste Management takeover offer.
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