TORONTO – Progressive Waste Solutions has agreed to a friendly deal that will see the Canadian company merged into a new business that’s controlled by shareholders and management of Texas-based Waste Connections.
The deal will merge two of North America’s biggest solid-waste operations and create a new Canadian corporate entity that’s 70 per cent owned by shareholders of Waste Connections and 30 per cent by shareholders of Progressive Waste.
The announcement comes two weeks after Progressive confirmed it was reviewing its strategic options.
Based on Monday’s closing stock price of $33.82 per share, Progressive (TSX:BIN) was worth nearly C$4 billion and Waste Connections (NYSE:WCN) was worth about US$6.24 billion as stand-alone companies.
Waste Connections is based in Woodlands, Texas – north of Houston – and it operates in 32 states.
The companies say the current management of Waste Connections will lead the combined company, which will maintain a Canadian headquarters in the Toronto area.
“We are extremely excited to welcome Progressive Waste into the Waste Connections family and believe the combination will be quite compelling to our collective employees, shareholders and other stakeholders,” said Ronald Mittelstaedt, the chief executive officer and chairman of Waste Connections.
“Under our leadership, we believe we can instill the corporate culture, safety focus, operational excellence and accountability that have served us so well and which we believe are necessary for long-term success within Progressive Waste’s complementary markets.
Progressive announced separately that it has appointed executive vice-president Dan Pio to head the integration efforts. Several other Progressive executives will remain but chief operating officer, Kevin Walbridge, and chief financial officer Ian Kidson are leaving the company.
Progressive said it expects president and chief executive Joseph Quarin will also leave the company to pursue other opportunities.
“Combining Progressive Waste and Waste Connections makes compelling strategic and financial sense, and the all-stock nature of the transaction provides Progressive Waste shareholders with the opportunity to participate in the significant near- and long-term upside potential of the combination,” Quarin said in the joint statement issued by Waste Connections.