USA Waste Services to Buy Chambers in $725-Million Deal : Merger: Acquisition will create fourth-largest solid waste company in North America.
USA Waste Services, Inc. said Monday it is buying Pittsburgh-based Chambers Development Company, Inc. in a $725-million deal that will create the fourth-largest solid waste company in North America.
The resulting company will have annual revenue of about $450 million, the companies said, with operations in 21 states. Those operations will include 25 municipal solid waste landfills with permitted capacity in excess of 340 million cubic yards, 37 collection companies and 13 transfer stations.
Chambers Chairman and Chief Executive John Rangos Sr. said the Chambers-USA Waste combination would create a strong entity “capable of participating in the continuing consolidation occurring in the solid waste industry.” Based on USA Waste’s closing $14 stock price on Nov. 25 and accounting for Chambers’ existing debt, the transaction has a total value of approximately $725 million, the companies said.
The new company will be led by John Drury of Dallas-based USA Waste, as chairman and chief executive.
Donald Moorehead Jr. of USA Waste and John Rangos Sr. of Chambers will serve as vice chairmen of the board of directors. Moorehead will also function as USA Waste’s chief development officer.
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“Chambers has some of the finest landfill assets in North America and the combination of the two companies will provide significant benefits to both shareholder groups,” Drury said in a statement announcing the deal.
“Our strong waste collection operations coupled with Chambers’ exceptional landfill properties will provide significant operating leverage to the combined asset base,” he said.
Under the terms of the definitive merger agreement, USA Waste will issue 0.41667 shares of its common stock for each share of Chambers’ Class A common stock and common stock outstanding, subject to certain adjustments. In the aggregate, USA Waste will issue approximately 27.8 million shares of its common stock in connection with the merger.
Chambers shares closed up $1.125 to $4.50 in American Stock Exchange trading Monday. USA Waste shares dropped to $12.50, down $1.50 on the New York Stock Exchange.
