Garbage Company Progressive Waste Solutions Explores SaleBy , , and
Company said it has started a strategic review, hired JPMorgan
Canadian company has market value of about $2.7 billion
Progressive Waste Solutions Ltd., a garbage company serving more than 4 million customers in Canada and the U.S., is exploring a sale after cutting its profit forecast because of rising costs, according to people familiar with the matter.
The Canadian company, which is listed in New York and Toronto, is working with financial advisers who reached out to potential buyers in recent weeks, said the people, who asked not to be identified because discussions are private.
Talks are preliminary and the company may decide against pursuing a sale, the people said. Progressive Waste Solutions may struggle to find a buyer among garbage companies because they may hesitate to make such a large acquisition, one of the people said.
Progressive Waste shares rose more than 7 percent in both New York and Toronto, valuing the company at about $2.7 billion.
Progressive Waste, based in Vaughan, Ontario, just outside of Toronto, has declined about 22 percent in the last 12 months in New York trading and about 8 percent on the Canadian exchange. The company in October lowered its 2015 earnings forecast to a range of $480 million to $485 million from $500 million to $515 million, citing higher-than-expected labor, repair and maintenance costs in its West region. The company provides waste collection, recycling and disposal services in about a dozen U.S. states and half a dozen Canadian provinces.
A surge in global mergers and acquisitions to a record $3.8 trillion in 2015 has also spread to the so-called environmental control industry, including waste management and recycling. The value of deals in the industry reached $21 billion last year, an increase of 40 percent from 2014, almost matching the peak in 2006, according to data compiled by Bloomberg. Consolidation among garbage companies may help them cut costs.
— With assistance by Scott Deveau, and Aaron Kirchfeld
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