Waste Management Inc (NYSE:WM) is reportedly nearing a huge acquisition deal to purchase medical-waste-disposal company Stericycle Inc (NASDAQ:SRCL) for approximately $7 billion, inclusive of debt.
The acquisition of Bannockburn, Illinois-based Stericycle, which carries over $1 billion in debt, might be announced as early as Monday, according to a report from the WSJ.
Stericycle's services would enhance Waste Management's capabilities, providing a stronger presence in the medical-waste-disposal sector, which saw increased demand during the COVID-19 pandemic.
Waste Management, based in Houston, operates the largest landfill network in North America with over 250 sites.
Currently, Waste Management's primary revenue comes from its collection operations, which handle solid waste and recyclables from residential and commercial clients, transporting them to various facilities. The company also operates a recycling unit, contributing about 8% to its total revenue by offering communities an alternative to landfill disposal, as per the report.
Stericycle focuses on the collection and disposal of hazardous medical waste and also operates a document shredding service known as Shred-It.
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Stericycle is valued at approximately $4.8 billion. For Waste Management, with a market value close to $85 billion, the Stericycle acquisition represents a relatively small investment.
Stericycle's stock has risen over 18% in the last 12 months.
The M&A market in the U.S. is seeing renewed activity after a period of stagnation caused by high interest rates and other factors.
Recent notable deals include ConocoPhillips' (NYSE:COP) acquisition of Marathon Oil Corp (NYSE:MRO) and T-Mobile US Inc (NASDAQ:TMUS) $4.4 billion purchase of most of United States Cellular Corp (NYSE:USM) operations.
Waste Management stock has gained more than 27% in the last 12 months. Investors can gain exposure to the stock via IShares U.S. Utilities ETF (NYSE:IDU) and TCW Transform Systems ETF (NYSE:NETZ).
Price Action: SRCL shares closed higher by 4.54% at $51.54 on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.