Item 1.01. Entry into a Material Definitive Agreement.
Amendment to Merger Agreement
On June 24, 2020, Waste Management, Inc., a Delaware corporation (the
"Company"), entered into Amendment No. 1 (the "Amendment") to the Agreement and
Plan of Merger, dated as of April 14, 2019 (the "Merger Agreement" and, together
with the Amendment, the "Amended Merger Agreement"), by and among the Company,
Everglades Merger Sub Inc., a Delaware corporation and a wholly-owned indirect
subsidiary of the Company ("Merger Sub"), and Advanced Disposal Services, Inc.,
a Delaware corporation ("Advanced Disposal"), previously announced on April 15,
2019.
The Amended Merger Agreement provides that, upon the terms and subject to the
conditions set forth therein, Merger Sub will merge with and into Advanced
Disposal (the "Merger" and collectively with the other transactions contemplated
by the Amended Merger Agreement, the "Transactions"), with Advanced Disposal
continuing as the surviving corporation and as a wholly-owned indirect
subsidiary of the Company.
Under the terms of the Amended Merger Agreement, the Company, Advanced Disposal
and Merger Sub have agreed to reduce the merger consideration to be paid by the
Company for each share of Advanced Disposal common stock, par value $0.01 per
share ("Advanced Disposal Common Stock"), such that each share of Advanced
Disposal Common Stock issued and outstanding immediately prior to the effective
time of the Merger (other than shares (i) owned by the Company, Merger Sub or
Advanced Disposal or any of their respective subsidiaries or (ii) for which
appraisal rights have been demanded properly in accordance with Section 262 of
the General Corporation Law of the State of Delaware) will be converted into the
right to receive $30.30 per share in cash, without interest.
Under the Amended Merger Agreement, the Company has agreed, among other things,
to: (i) use best efforts to obtain approval under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and remove the
limitations set forth in the Merger Agreement on the Company's obligation to
divest or sell assets and take other actions in connection with using its best
efforts to obtain antitrust approval; (ii) remove the obligation that Advanced
Disposal reimburse the Company for up to $15 million for expenses in the event
that the Amended Merger Agreement is terminated due to the stockholders of
Advanced Disposal failing to approve the Merger; (iii) increase the termination
fee from $150,000,000 to $250,000,000, which the Company will be required to pay
to Advanced Disposal under certain circumstances specified in the Amended Merger
Agreement if the Amended Merger Agreement is terminated because (A) of the
issuance of a nonappealable court order or legal restraint prohibiting the
Merger or (B) the Transactions have not been consummated by the End Date (as
defined below).
The Amendment also changes the date after which the Company and Advanced
Disposal will have a mutual right to terminate the Merger Agreement from July
13, 2020 to September 30, 2020 (the "End Date"), which date will automatically
extend to November 30, 2020 if any of the Specified Conditions (as defined
below, but in the case of clause (iii) of such definition, only to the extent it
is issued pursuant to an antitrust law) have not been satisfied by the End Date
(but all other conditions to the Company's obligation to close are satisfied, or
would be satisfied if the Closing would have occurred, on the End Date).
The consummation of the Merger remains subject to certain conditions, including
(i) approval of the Amended Merger Agreement by the affirmative vote of the
holders of a majority of the outstanding shares of Advanced Disposal Common
Stock (the "Stockholder Approval"), (ii) the expiration or termination of any
waiting period under the HSR Act and the rules and regulations promulgated
thereunder, and (iii) the absence of any law or order restraining, enjoining or
otherwise prohibiting the Merger (each of the foregoing conditions, the
"Specified Conditions").
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Pursuant to the Amendment, each party has certified to each other that such
party's closing conditions with respect to the accuracy of its representations
and performance of its covenants, and, with respect to the Company's and Merger
Sub's obligations to consummate the Merger, the absence of a Material Adverse
Effect (as defined in the Amended Merger Agreement), would be satisfied as of
June 24, 2020 if the closing of the Merger were to be June 24, 2020. In
addition, each of the parties acknowledged that, to the parties' respective
knowledge, as of the date of the Amendment, no occurrence has occurred that
would prevent the closing of the Merger. The Company and Merger Sub have also
agreed to not assert that any of such conditions are not satisfied at the
Closing as a result of what such parties had knowledge of as of the date of the
Amendment.
The Board of Directors of Advanced Disposal (the "Advanced Disposal Board") has
unanimously (i) determined that the Merger and the Transactions are fair to, and
in the best interests of Advanced Disposal and its stockholders, and approved
and declared advisable the Amendment and the Transactions, including the Merger,
(ii) approved the execution and delivery by Advanced Disposal of the Amendment,
the performance by Advanced Disposal of the Amended Merger Agreement and the
consummation of the Transactions, including the Merger, upon the terms and
subject to the conditions set forth in the Amended Merger Agreement,
(iii) recommended the adoption of the Amended Merger Agreement by the
stockholders of Advanced Disposal and (iv) directed that the adoption of the
Amended Merger Agreement be submitted to a vote of Advanced Disposal's
stockholders.
Except as expressly modified pursuant to the Amendment, the Merger Agreement,
which was previously filed as Exhibit 2.1 to the Current Report on Form 8-K with
the Securities and Exchange Commission ("SEC") by the Company on April 15,
2019 , remains in full force and effect. The foregoing description of the
Amendment and the transactions contemplated thereby does not purport to be
complete and is qualified in its entirety by reference to the Amendment, a copy
of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
Amended and Restated Voting Agreement
In addition to, and concurrently with the execution of the Amended Merger
Agreement, on June 24, 2020, Canada Pension Plan Investment Board (the "Key
Stockholder") representing approximately 18% of the outstanding Advanced
Disposal Common Stock entered into an Amended and Restated Voting and Support
Agreement (as amended and restated, the "Voting Agreement") with the Company,
pursuant to which, among other things, and subject to the terms and conditions
set forth therein, the Key Stockholder has agreed to vote its shares of Advanced
Disposal Common Stock in favor of the adoption of the Amended Merger Agreement
and against any alternative proposal. The Voting Agreement automatically
terminates upon the earliest to occur of (i) the Expiration Time (defined in the
Voting Agreement as the earlier to occur of (x) the effective time of the Merger
. . .
Item 7.01. Regulation FD Disclosure.
Press Release
On June 24, 2020, the Company and Advanced Disposal issued a joint press release
announcing entry into the Amended Merger Agreement. The Company and Advanced
Disposal also announced in that press release that they have entered into an
agreement to sell substantially all of the assets anticipated to be required to
be divested in connection with the Merger to an affiliate of GFL Environmental
Inc. A copy of the press release is attached hereto as Exhibit 99.1.
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The information contained in Item 7.01 of this report, including Exhibit 99.1,
shall not be incorporated by reference into any filing of the registrant,
whether made before, on or after the date hereof, regardless of any general
incorporation language in such filing, unless expressly incorporated by specific
reference to such filing. The information contained in Item 7.01 of this report,
including Exhibit 99.1, shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section.
Item 8.01. Other Events.
As described in Item 7.01 above, on June 24, 2020, the Company and Advanced
Disposal announced the entry into an agreement pursuant to which the Company and
Advanced Disposal will sell certain of their solid waste collection,
intermediary waste delivery and terminal waste delivery assets in selected
portions of the United States to an affiliate of GFL Environmental Inc. in
connection with the Merger. The transaction is conditioned on the closing of the
Merger and other customary closing conditions, and remains subject to ongoing
review and approval by the U.S. Department of Justice.
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