Canada's IESI-BFC to acquire rival Waste Services

By Euan Rocha

TORONTO (Reuters) - IESI-BFC Ltd (BIN.TO) will acquire fellow Canadian trash hauler Waste Services Inc (WSII.O) in an all-stock deal worth $370 million that will create North America's third-largest solid-waste management company, the companies said on Wednesday.

The deal will help IESI-BFC, the No. 4 North American trash hauler, expand its presence in Canada and allow it to establish a presence in the U.S. state of Florida, IESI-BFC Chief Executive Keith Carrigan said.

"More importantly, this transaction will allow our two companies to grow more meaningfully than they could on their own," he added.

Based on 47.66 million Waste Services shares outstanding and an exchange ratio of 0.5833 of an IESI-BFC share for each Waste Services share, the takeover offer implies a deal value of $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.

Analysts said the deal is positive for both companies as it is likely to improve IESI-BFC's valuation versus its peers, while allowing Waste Services' shareholders to benefit from any upside.

"It's a great deal. I was looking for them to make some kind of an acquisition and this is a big one," said Octagon Capital analyst Robert Gibson.