Medical trash turns into less valuable treasure

Waste Management

03/06/2024 16:33

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Robert Cyran
       NEW YORK, June 3 (Reuters Breakingviews) - Waste
Management is paying $7 bln to buy Stericycle, which had a mixed
pandemic. Vaccination needles injected profit into biowaste
disposal, but work-from-home shredded the document destruction
business. Unless the buyer can sweep up some pricing power, the
deal is mostly scraps.
    
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    CONTEXT NEWS 
    Waste Management said on June 3 it had agreed to buy
Stericycle for $5.8 billion, or $62 a share, a 20% premium to
the closing price on May 31. The value of the deal, including
$1.4 billion of net debt, is $7.2 billion.
    Two-thirds of Stericycle’s $2.7 billion of revenue in 2023
came from its medical waste division, and the rest from
shredding and recycling confidential documents.
    Waste Management expects to generate more than $125 million
of annual synergies by cutting costs and improving Stericycle’s
logistics.
    Centerview Partners is advising Waste Management while BofA
Securities is advising Stericycle.

 (Editing by Jeffrey Goldfarb and Pranav Kiran)
 ((For previous columns by the author, Reuters customers can
click on  CYRAN/ 
robert.cyran@thomsonreuters.com; Reuters Messaging:
robert.cyran.thomsonreuters.com@reuters.net))