Stericycle, Inc

SRCLP

Waste Management will acquire Stericycle in a $7.2 billion deal, the companies said Monday. WM will acquire all outstanding shares of Stericycle for $62 per share in cash, representing the deal's total value when including Stericycle's net debt of around $1.4 billion.

Waste Management is nearing a deal to buy medical-waste-disposal company Stericycle for roughly $7 billion including debt.

SRCL's Q1 2024 operating margins beat expectations, and the company's EBITDA margin is expected to improve significantly for full-year 2024. I anticipate that Stericycle's Secure Information Destruction segment can realize a turnaround due to a more favorable base for YoY comparison in 2H and the introduction of a subscription service. My Buy rating for SRCL stays intact following an assessment of its outlook and valuations.

SRCL is targeting to deliver an impressive +13%-17% EBITDA expansion on an annual basis for the FY 2023-2027 time frame. Stericycle might be ready to embark on accretive acquisitions, after having completed 19 asset or business sales in the last five years. I retain a Buy rating for SRCL, as I have a positive view of the company's prospects for the long run.