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Waste Management Acquires Greenstar

by Zacks Equity Research

February 04, 2013 | Comments : 0 Recommended this article: (0)

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In an effort to expand its customer base, service network and recycling volumes, WM Recycle America, L.L.C., a subsidiary of Waste Management, Inc. (WM - Analyst Report), acquired Greenstar, LLC for an undisclosed amount. The business was acquired from NTR plc and includes 12 material recovery facilities that managed approximately 1.5 million tons of recycled material in 2012.

This acquisition has added one of the nation’s largest recyclers to its business. Post-acquisition, Waste Management customers will have greater access to recycling solutions and the company expects the recycling business to grow over the long term. This acquisition also expands Waste Management’s already extensive recycling network.

The acquisition is expected to be accretive to the company’s earnings in the long run. The company has set a goal of managing 20 million tons of recyclable material by 2020. The acquisition of Greenstar will enable the company to reap synergistic benefits and augments its growth and transformation strategy to extract more value from the existing materials.

The transaction is also in line with the company’s strategy to grow its earnings, expand its brokerage and national account service offerings, thus further expanding its margins.

Headquartered in Houston, Texas, Waste Management is the largest provider of comprehensive waste management services in North America. The company provides collection, transfer, recycling and resource recovery, as well as disposal services to residential, commercial, industrial and municipal customers. It is also a leading developer, operator and owner of waste-to-energy and landfill gas-to-energy facilities in the U.S.

However, the company operates in an intensely competitive landscape that includes big players such as Clean Harbors, Inc (CLH) and Republic Services Inc (RSG - Analyst Report).

Waste Management currently has a Zacks Rank #2 (Buy). One of its competitors, Navigant Consulting Inc (NCI - Analyst Report) also carries a Zacks Rank #2 (Buy).

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