FOLLOW US

Waste Management Inc. has agreed to buy medical waste company Stericycle at an enterprise value of about $7.2 billion, inclusive of approximately $1.4 billion of debt, the companies said in a statement Monday.

Vinson & Elkins LLP and Baker Botts LLP are representing Waste Management, while Latham & Watkins LLP is representing Illinois-based Stericycle on the deal, which the companies said has been approved by both of their boards of directors and is expected to close in the fourth quarter of this year.

The $62 per share cash deal represents a 24% premium to Stericycle's 60-day volume weighted average price as of May 23, the last trading day before a media report disclosed a potential sale, the statement said.

Stericycle's stock was up about 15% Monday morning, at $59.25 per share, after closing at $51.54 per share Friday.

Houston-based Waste Management noted that Stericycle's medical waste and secure information destruction solutions are positioned to benefit from the positive growth outlook for healthcare services in North America.

"We are committed to maximizing value for all our stakeholders by providing a comprehensive suite of environmental solutions to the market," Jim Fish, president and CEO of Waste Management, said in Monday's statement. "The acquisition of Stericycle ... broadens the scope of our service offerings, bringing together the leader in solid waste and a premier company in regulated medical waste services."

Cindy J. Miller, Stericycle's president and CEO, said that the deal "creates significant value for shareholders, unlocks new opportunities to deliver diversified services to customers, and supports investment in the growth and development of our team members."

"As customers seek to manage a greater volume and variety of materials in a safe, responsible, and sustainable way, Stericycle's knowledge and expertise in regulated medical waste and secure information destruction are compelling additions to WM's broad portfolio of environmental solutions," she added.

Centerview Partners LLC is the exclusive financial adviser to Waste Management, while BofA Securities is the exclusive financial adviser to Stericycle.

BofA is represented by Fried Frank Harris Shriver & Jacobson LLP, with a team led by M&A partners Philip Richter and Roy Tannenbaum.

The Vinson & Elkins team representing Waste Management is led by M&A partners Steve Gill, Doug McWilliams, Ron Tenpas, and Palmina Fava, and also includes benefits partner David D'Alessandro; environmental partner Matt Dobbins; labor partner Becky Baker; tax partners John Lynch and Lina Dimachkieh; finance partner Dave Wicklund; litigation partner Jamie Leader; real estate partner Prentiss Cutshaw; and data privacy partner Michael Kurzer.

The Baker Botts antitrust and foreign direct investment team representing Waste Management includes partners Jim Kress, Jeffrey Oliver, David Cardwell, and Matthew Levitt, special counsel Christina Ryu-Naya, and counsel Sofia Doudountsak.

The Latham team representing Stericycle is led by M&A partners Bradley Faris, Max Schleusener, and Terra Reynolds, and also includes tax partner Diana Doyle; executive compensation and benefits partner Bradd Williamson; environmental partner Joshua Marnitz; intellectual property partner Jeffrey Tochner; data privacy partner Robert Blamires; antitrust partners Joshua Holian, Héctor Armengod, and Jana Dammann de Chapto; labor and employment partner Nineveh Alkhas; compliance and regulatory partners Sean Berkowitz, Mark Mester, Meredith Monroe, Kevin Jakopchek, Doug Greenburg, Drew Wisniewski, and Nicholas McQuaid; and debt financing partner Scott Ollivierre.