Advanced Disposal Stock Begins Trading on NYSE

Updated: 4:13 PM

Advanced Disposal Services began trading on the New York Stock Exchange Thursday, moving ahead with its long-planned initial public offering. The firm offered 19,250,000 shares of its common stock at $18.00 per share but effectively entered the market at $20.50 per share. The stock at one point rose to $21.50 per share before closing at $19.82 per share.

All of the shares were offered by the company. The shares are trading on the New York Stock Exchange under the ticker symbol “ADSW.”

Trading of the stock began just as Hurricane Matthew was bearing down on the Southeastern U.S., which is a big part of Advanced Disposal's footprint. Advanced Disposal CEO Richard Burke spoke with The Street about his responsibility for the safety of Advanced Disposal's employees while preparing to help with cleanup efforts.

The underwriters had the option to purchase up to an additional 2,887,500 shares of common stock.

The company intends to use the net proceeds from the shares offered to repay outstanding borrowings under the Term Loan B portion of its senior secured credit facilities.

Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC and Barclays Capital Inc. acted as lead joint book-running managers and representatives of the underwriters for the offering. UBS Securities LLC also acted as a lead joint book-running manager. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Macquarie Capital (USA) Inc., Morgan Stanley & Co. LLC, and Stifel also acted as joint book-running managers, and SMBC Nikko Securities America, Inc. and First Analysis Securities Corporation acted as co-managers.

The Ponte Vedra, Fla.-based hauler had originally planned to go public in February, but, like a handful of other firms with similar plans, it was forced to postpone the IPO at a time when equities markets were roiled.

The offering comes less than two months after Canada Pension Plan Investment Board (CPPIB) completed a $280 million investment in Series B Preferred Units of Star Atlantic Waste Holdings II L.P., which is an investment partnership sponsored by Highstar Capital and the principal owner of Advanced Disposal Services.

According to the terms of that deal, CPPIB's investment will automatically be converted into common stock if Advanced Disposal Services Inc. completes its IPO.

Proceeds of that sale were used to redeem an investor's Series A partnership investment, and all remaining Series A Preferred Units were converted into Series B Preferred Units, which will result in lower preferred stock accrual expenses.

Advanced Disposal has the financial backing of private equity firm Highstar Capital. Highstar was purchased by Oaktree Capital Group in June 2014 and that deal included some conditions that may have contributed to the August deal.

According to a 2015 Waste360 interview with Stifel analyst Michael E. Hoffman, “Remember, Highstar (Advanced Disposal’s owner) sold a big chunk of Highstar to Oaktree, and retained this fund that holds the ADS portfolio position. We believe they have time-line milestones to hit when they start monetizing that portfolio; otherwise, ownership begins to accrue to Oaktree. I think there’s a little bit of, if you’re going to the public market, you’ve got to start that process sooner or later in order to create an orderly exit. You’re not exiting all in the first go, right? The stock market won’t let you do that.”