Waste Management, Inc. (WM) recently announced that it has completed the divestiture of Wheelabrator Technologies, Inc. to an affiliate of private equity firm Energy Capital Partners for approximately $1.94 billion.
Waste Management intends to utilize the proceeds from the asset sale to drive incremental shareholder value in a way that would lead to earnings accretion in the long term. These include a combination of share repurchase transactions and acquisition activities.
In the last reported quarter, Wheelabrator revenues were down 4.2% to $205 million. The strategic move to restructure its portfolio is aimed to concentrate more on the core operations and reduce earnings volatility related to electricity sales. The restructuring initiatives are likely to reap benefits in the long run. Consequently, Waste Management decided to offload the business in the best interests of its shareholders.
Headquartered in Houston, TX, 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.
Waste Management is well executing its initiative to refocus on the core business activities and instil price and cost discipline to achieve better margins and returns in the long run.
Waste Management currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look include FTI Consulting, Inc. (FCN) and CBIZ, Inc. (CBZ), carrying a Zacks Rank #1 (Strong Buy), and Waste Connections Inc. (WCN) carrying a Zacks Rank #2 (Buy).
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