ACQUISITIONS: Stericycle Will Buy Allied/BFI Medwaste

Melanie A. Lasoff

Stericycle Inc., Lake Forest, Ill., has signed an agreement with Allied Waste Industries, Scottsdale, Ariz., to purchase all the medical waste operations Allied would have acquired in its acquisition of Browning-Ferris Industries (BFI), Houston.

In the agreement - which is contingent on the closing of the Allied/BFI deal - Stericycle will pay Allied $440 million in cash for the more than 200,000 customers and 25 treatment facilities in the United States, Puerto Rico and Canada.

Stericycle currently has 78,000 customers and 12 treatment facilities.

The transaction, the largest in Stericycle's history, is expected to yield operating efficiencies in Stericycle's existing service areas and add new ones.

Annualized revenues from BFI's medical waste operations were approximately $198 million for the fiscal year 1998, which ended on Sept. 30, 1998. Stericycle's 1998 revenues for its fiscal 1998, which ended Dec. 31, totaled $67 million.

The agreement is consistent with Allied's intent to divest assets and operations that are not in line with its core solid waste business, according to Tom Van Weelden, president and CEO of Allied.

Allied's $9.1 billion acquisition of BFI, which was announced in March, is expected to be finalized before the end of the year.