Waste companies

December 23, 2014


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Zacks Equity ResearchWaste Management, Inc. (WM - Analyst Report) recently completed the acquisition of Deffenbaugh Disposal, Inc. after securing all regulatory approvals and fulfilling other mandatory closing conditions.

Deffenbaugh, in Kansas City, is one of the largest privately owned disposal firms in the Midwest, operating a portfolio of one municipal solid waste landfill, one construction and demolition landfill, two material recovery facilities, and seven transfer stations. The company offers its services in the cities of Omaha, NE; St. Joseph, MO; Topeka, KS; as well as in Northwest Arkansas and Kansas City metropolitan area.

With 1.7 million tons of waste and recyclable material collections in 2013, Deffenbaugh is a strategic fit for Waste Management. In addition to reinforcing its core competence, the transaction enables Waste Management to extend its geographic footprint, particularly to the attractive Kansas City market where it has a limited presence. The acquisition of Deffenbaugh at an undisclosed price will further help the company to replace revenues lost from the divesture of Wheelabrator.

On the other hand, Deffenbaugh expects to better serve its existing customers by leveraging the world-class facilities and technical know-how of Waste Management. Deffenbaugh has also been modernizing its fleet over the past five years to improve efficiency and expand into newer markets. The transaction, therefore, is likely to be a win-win deal for both the companies.

Headquartered in Houston, TX, Waste Management provides collection, transfer, recycling and resource recovery, as well as disposal services to residential, commercial, industrial and municipal customers in the U.S. The company aims to improve customer retention by consistently providing better services and higher value solutions.

Waste Management currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Landauer Inc. (LDR - Snapshot Report) and Perma-Fix Environmental Services Inc. (PESI - Snapshot Report), carrying a Zacks Rank #1 (Strong Buy), and Sharps Compliance Corp. (SMED - Snapshot Report) with a Zacks Rank #2 (Buy).

Source: www.zacks.com
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