June 11, 2024 | Industrials | North America | Active
On 3-Jun-24, Waste Management (“WM”) announced it has agreed to acquire medical waste company Stericycle at an enterprise value of approximately $7.2bn, which includes $1.4bn of debt. WM is offering $62.00 per Stericycle share, representing a 38.5% premium to the target’s undisturbed price on 23-May-24, when Bloomberg first reported that the company was exploring a sale. The deal has been approved by both boards and conditions to closing include Stericycle shareholder approval (50%; a WM vote is not required) and regulatory approvals, including HSR. The merger agreement does not specify any foreign antitrust or investment clearance conditions. However, since Stericycle generates over $400m from international operations, some foreign regulatory filings are possible. Clauses on reasonable best efforts require the companies to take “any and all steps” necessary to gain regulatory approvals and to “lift or rescind any injunction or restraining order” that would otherwise prohibit the transaction from closing. However, a burdensome clause restricts offering any remedies that would either (i) “adversely impact projected EBITDA for the first year after closing” by more than $25m, annually, or (ii) require the companies to provide prior notice, unless the requirement is immaterial. At the written request of WM, Stericycle is required to agree to take any action “that would constitute a burdensome condition” as long as such action is “conditioned upon the occurrence of the closing.” The termination fee is $175m, and the RTF is $262.5mn. The deal is not subject to a financing condition and WM intends to use a combination of bank debt and senior notes to fund the acquisition. An HSR notification will be made within ...
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