Waste Management Inc., the largest U.S. waste company, agreed Monday to buy Ponte Vedra-based Advanced Disposal Services Inc. for $4.9 billion.
Advanced Disposal, founded in 2000, moved into a new headquarters building in Nocatee in Ponte Vedra in 2013 with the help of nearly $1 million in state and county incentives.
The company promised to retain 35 jobs and create 85 more in exchange for the incentives.
Advanced Disposal’s annual report said its lease on its headquarters office expires in 2020.
In response to an emailed question about the future of the headquarters and employees, Advanced Disposal said it could not comment beyond a Monday news release on the merger. However, the news release did not address those topics.
Advanced Disposal, with $1.56 billion in revenue last year, has about 6,000 employees with operations in 16 states.
Houston-based Waste Management had $14.9 billion in 2018 revenue. The company has about 43,700 employees with operations in 49 states and Canada.
“With this acquisition, we will grow our asset footprint to serve more customers and communities and generate significant growth and value creation opportunities for Waste Management’s shareholders and our combined company’s employee base,” Waste Management CEO Jim Fish said in the news release.
“We view Waste Management as an industry leader with one of the most respected brands in the nation,” Advanced Disposal CEO Richard Burke said in the news release.
“This acquisition stands as a testament to the strength of the Advanced Disposal business and brings together two strong waste management teams with extensive environmental services expertise to better serve our customers and communities,” he said.
Waste Management will pay $33.15 a share to buy Advanced Disposal, which closed Friday at $27.14. Advanced Disposal went public in 2016 at $18 a share.
The purchase price includes the assumption of $1.9 billion in debt.
Stifel analyst Michael Hoffman said in a research note Monday that Advanced Disposal had several options to increase its stock price, including selling assets to pay down debt or sell the entire company.
“Any or all of these actions would still only get Advanced Disposal to about a $35 valuation today. We believe the only one that does that for sure is sell the company,” he said.
Hoffman said it’s “hard to imagine” another waste company could make a higher offer for Advanced Disposal than industry giant Waste Management.
Hoffman said the “transformative acquisition” also helps Waste Management, as he raised his rating on the company from “hold” to “buy.”
Waste Management’s stock jumped as much as $3.89 to a record high $105.68 Monday morning after the merger announcement.