HOUSTON (AP) — Waste Management is selling a subsidiary to Energy Capital Partners for $1.94 billion as part of its effort to focus on its core business.
It is selling Wheelabrator Technologies Inc., which owns or runs 17 waste-to-energy facilities and four independent power-producing plants in the U.S. The business also has four ash monofill landfills, three transfer stations and an ongoing development and construction project in the U.K. Wheelabrator's 2013 revenue totaled about $845 million.
Waste Management Inc. said Tuesday that it will enter a long-term agreement to supply waste to certain Wheelabrator facilities once the transaction is complete.
The Houston-based trash and recycling hauler plans to use proceeds from the sale to buy assets related to its core business and for stock repurchases.
The deal is targeted to close later this year. It still needs approval from the Federal Energy Regulatory Commission.
Waste Management now plans to resume share buybacks that were put on hold while talks about the sale of Wheelabrator were going on. It anticipates using an accelerated stock repurchase program to spend the full amount of its previously disclosed $600 million authorization on share buybacks over a maximum period of about six months.
Waste Management also reported mixed results for its second quarter. The garbage and recycling company's adjusted profit topped analysts' estimates, but revenue fell short.
Waste Management anticipates meeting or beating its full-year adjusted profit forecast of $2.30 to $2.35 per share. Analysts polled by FactSet expected $2.36 per share.
Waste Management shares rose 80 cents, or 1.8 percent, to $44.69 in premarket trading shortly before the market open.