Waste Management to acquire Stericycle in $7.2 billion deal
What is the expected timeline for the completion of the Waste Management and Stericycle acquisition?
The Waste Management and Stericycle acquisition is expected to close as early as the fourth quarter of 2024.
How much is Waste Management paying per share to acquire Stericycle?
Waste Management is paying $62 per share to acquire Stericycle. This price represents the deal's total value when including Stericycle's net debt of around $1.4 billion. Additionally, the per-share price also represents a 24% premium to Stericycle's 60-day volume-weighted average price as of May 23, which was the last trading day before an article reported that Stericycle was considering a potential sale2.
What is the significance of the $62 per share price in relation to Stericycle's recent stock performance?
The $62 per share price in the acquisition deal between Waste Management and Stericycle holds significant importance in relation to Stericycle's recent stock performance. This price per share represents a 24% premium on Stericycle's 60-day volume-weighted average price as of May 23, which was the last trading day before reports emerged that Stericycle was considering a potential sale due to takeover interest.
This premium indicates that Waste Management is offering a substantial amount above the recent average trading price of Stericycle's shares, making it an attractive proposition for Stericycle shareholders. The higher-than-market price per share can be seen as a strategy by Waste Management to entice shareholders to sell their shares, facilitating a smooth acquisition process.
Moreover, the announcement of the deal led to a more than 16% increase in Stericycle's share price in premarket trading on the day of the announcement, showing a positive market reaction to the news. Conversely, shares of Waste Management fell nearly 2%, possibly due to investor concerns about the acquisition's impact on the company's financials or integration challenges.
In summary, the $62 per share price represents a significant premium for Stericycle shareholders and indicates a strong market response to the acquisition announcement. It also highlights Waste Management's commitment to the deal and their willingness to pay a premium price to acquire Stericycle.