TORONTO (Reuters) - IESI-BFC Ltd
The deal will help IESI-BFC expand its presence in Canada and allow it to establish a meaningful presence in the U.S. state of Florida, IESI-BFC Chief Executive Keith Carrigan said in announcing the deal on Wednesday.
"More importantly, this transaction will allow our two companies to grow more meaningfully than they could on their own," Carrigan said in a statement.
Based on 47.66 million Waste Services shares outstanding and an exchange ratio of 0.5833 IESI-BFC share for each Waste Services share, the deal values Waste Services at $370 million.
The deal values Waste Services at $7.76 per share, a 7.2 percent premium to its closing share price of $7.24 on Tuesday.
Shareholders of Burlington, Ontario-based Waste Services will own 23 percent of the combined company.
The combined company, to be headquartered in Toronto, will have more than 6,000 employees serving commercial, industrial and residential customers in 11 U.S. states, the District of Columbia and six Canadian provinces.
The waste management industry was at the center of an extended three-way merger battle in 2008. The No. 1 U.S. trash hauler, Waste Management Inc
The turmoil in global financial markets a few months later prompted Waste Management to withdraw its bid and paved the way for Republic Services to close its $4.4 billion acquisition of Allied Waste.
DEAL ACCRETIVE
IESI-BFC and Waste Services, in a joint statement, said the proposed deal will boost both free cash flow and earnings per share in 2010.
The combined company is expected to realize annual pre-tax savings of $25 million and $30 million within two years of closing the deal.
Two of Waste Services' largest shareholders, Westbury and Kelso & Co, which together control 33 percent of the company's outstanding shares, have agreed to back the deal, the companies said.
The deal is expected to close during the first quarter of 2010 and has been approved by the boards of directors of both companies.
IESI-BFC shares were down 1 percent in early trading, while those of Waste Services were up 2.76 percent to $7.44.
(Reporting by Euan Rocha, editing by Maureen Bavdek and John Wallace)
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