Advanced Disposal Services Gears Up for IPO

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Advanced Disposal Services has filed an amended S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering. The company intends to price its 19.25 million shares in the range of $18 to $21, with an overallotment option for an additional 2.89 million shares. At the maximum price, the entire offering is valued up to roughly $465 million. The company intends to list on the New York Stock Exchange under the symbol ADSW.

The underwriters for the offering are Deutsche Bank, Credit Suisse, Barclays, UBS Investment Bank, Merrill Lynch, Macquarie Capital, Morgan Stanley, Stifel, SMBC Nikko and First Analysis Securities.

This leading integrated provider of non-hazardous solid waste collection, transfer, recycling and disposal services operates primarily in secondary markets or under exclusive arrangements. The company has a presence in 18 states across the Midwest, South and eastern regions of the United States, serving approximately 2.8 million residential and 221,000 commercial and industrial customers through an extensive network of 92 collection operations, 72 transfer stations, 21 owned or operated recycling facilities and 39 owned or operated landfills.

The company seeks to drive financial performance in markets in which it owns or operates a landfill or in certain disposal-neutral markets, where the landfill is owned by a municipal customer. In markets in which it owns or operates a landfill, the company aims to create and maintain vertically integrated operations through which it manages a majority of customers’ waste from the point of collection through the point of disposal, a process referred to as internalization.

By internalizing a majority of the waste in these markets, ADS is able to deliver high-quality customer service while also ensuring a stable revenue stream and maximizing profitability and cash flow from operations. In disposal-neutral markets, it focuses selectively on opportunities where the company can negotiate exclusive arrangements with municipal customers, facilitating highly efficient and profitable collection operations with lower capital requirements.

The company detailed its finances as follows:

For the twelve months ended June 30, 2016, we generated revenues of $1.4 billion, net loss of $28.3 million, adjusted EBITDA of $401.4 million and cash flow from operations of $219.6 million.

ADS intends to use the net proceeds from this offering to repay its indebtedness, as well as for working capital and general corporate purposes.