Dive Brief:
- According to an industry analyst, Waste Management’s recent acquisition of Deffenbaugh Disposal Inc. was a savvy move as it helps the waste firm recoup income it lost in its sale of Wheelabrator Technologies Inc.
- Michael E. Hoffman, the managing director of institutional equity research at Stifel, Nicolaus & Co, told Waste 360 “it’s always been [Waste Management’s] intention to replace the Wheelabrator EBITDA and now they’ve replaced a quarter of it.”
- The cost of buying Deffenbaugh was reported to be around $405 million. The hauler sold Wheelabrator for $1.94 billion in July.
Dive Insight:
The purchase of Deffenbaugh allows Waste Management to penetrate more of its market, namely Kansas City, KS and the surrounding areas. Hoffman said that the hauler can be expected to purchase more assets. “[T]hey’ve got their eye on the exploration and production waste market, [and]... the hazardous waste market,” he continued.
In 2013, Waste Management shifted gears as it delved into the fracking waste sector. The company purchased two businesses specializing in fracking waste disposal in North Dakota. Analysts predict services in this market could potentially reach $30 billion per year.