Waste Management, Inc. (WM) announced the acquisition of City Wide Recycling LLC, which further expands the company’s recycling services provided to construction and demolition contractors. The company said that the transaction was closed on Dec 31, 2009.
 
Waste Management pointed that the City Wide Recycling developed southeastern Wisconsin’s largest, and the only automated, processing facility for recyclable wastes collected at construction and demolition job sites.
 
According to the company’s management, environmentally sensitive contractors are driving growth in recycling at construction sites in southeastern Wisconsin. Moreover, on January 1, the state of Wisconsin made it mandatory for construction contractors to recycle at least 50% of the waste produced during construction of state building projects of $5 million or more and all demolition projects. This acquisition will accelerate Waste Management’s growth in the construction-sector recycling services.
 
Waste Management is North America’s largest recycler, handling about 8 million tons of recyclables a year. The company has a goal of recycling triple that volume by 2020.
 
Waste Management continues to make acquisitions regularly to expand its service offerings and strengthen its market presence. The company closed $82 million in acquisitions during the third quarter, primarily in its collection line of business. In total, the company spent $127 million in acquisitions in the first three quarters of 2009.
 
Further, in the fourth quarter, the company announced the acquisition of Metro Waste Disposal, which primarily serves commercial and industrial customers in the Cleveland, Akron and Canton areas.
 
The company’s ability to generate strong cash flows enables it to invest in growth opportunities. Waste Management generated free cash flow of $839 million in the first nine months of 2009. Apart from acquisitions, the company uses its cash flow to pay dividends and repurchase shares. The company resumed its share repurchase program in the third quarter of 2009. In addition, during the fourth quarter, Waste Management announced its plans to increase its dividend by 8.6%.
Read the full analyst report on “WM”
Zacks Investment Research