Casella Waste Systems Announces Closing of Public Offering of Class A Common Stock and Full Exercise of Underwriters’ Option to Purchase Additional Shares

Rhea-AI Summary

Casella Waste Systems (NASDAQ: CWST) has closed its public offering of Class A common stock, including the full exercise of the underwriters' option to purchase additional shares. The company sold a total of 5,175,000 shares at $100.00 per share, raising aggregate gross proceeds of $517.5 million. The net proceeds will be used to finance the acquisition of Royal Carting and Welsh Sanitation, repay borrowings under its revolving credit facility, and for general corporate purposes.

The offering was managed by Raymond James, J.P. Morgan, and Stifel as joint book-running managers, with Goldman Sachs & Co. and Wolfe | Nomura Alliance acting as passive book-runners. The shares were offered through an automatically effective shelf registration statement previously filed with the SEC.

Positive

• Successful closing of public offering, raising $517.5 million in gross proceeds
• Full exercise of underwriters' option to purchase additional shares, indicating strong demand
• Proceeds to be used for strategic acquisition and debt repayment
• Strong support from major financial institutions as underwriters

Negative

• Potential dilution of existing shareholders due to issuance of new shares
• Increased debt if proceeds are used for acquisition rather than solely for debt repayment

Insights

Financial Analyst

Casella Waste Systems' successful public offering of 5,175,000 shares at $100.00 per share, raising $517.5 million in gross proceeds, is a significant financial move. This capital injection will primarily fund the acquisition of Royal Carting and Welsh Sanitation, potentially expanding Casella's market presence and operational capacity. The full exercise of the underwriters' option indicates strong investor confidence in the company's growth strategy. However, investors should note that while this offering strengthens Casella's financial position, it also dilutes existing shareholders' ownership. The use of proceeds to repay revolving credit facility borrowings suggests prudent debt management, which could improve the company's balance sheet health. Overall, this offering positions Casella for strategic growth but may have short-term dilutive effects on earnings per share.

Market Research Analyst

The successful completion of Casella's public offering at $100.00 per share, 25% above its current trading price, signals strong market confidence in the company's growth prospects. This premium pricing suggests investors are bullish on Casella's expansion strategy, particularly its acquisition plans. The waste management sector is experiencing consolidation and Casella's move to acquire Royal Carting and Welsh Sanitation aligns with industry trends. The involvement of major underwriters like Raymond James, J.P. Morgan and Stifel further validates the offering's credibility. However, the increased share count may impact short-term stock performance as the market adjusts to the dilution. Long-term investors should focus on how effectively Casella leverages this capital for growth and operational improvements in the competitive waste management landscape.

RUTLAND, Vt., Sept. 19, 2024 (GLOBE NEWSWIRE) -- Casella Waste Systems, Inc. (NASDAQ: CWST), a regional solid waste, recycling and resource management services company, announced today the closing of its previously announced underwritten public offering of shares of its Class A common stock, including the full exercise of the underwriters’ option to purchase an additional 675,000 shares, at a public offering price of $100.00 per share, before underwriting discounts. The exercise of the underwriters’ option to purchase additional shares brought the total number of shares of Class A common stock sold by Casella in the offering to 5,175,000 and increased the aggregate gross proceeds from the offering to $517.5 million, before deducting underwriting discounts and offering expenses.

Casella intends to use the net proceeds from the offering to finance its previously announced acquisition of Royal Carting and Welsh Sanitation, to repay borrowings under its revolving credit facility and for general corporate purposes.

Raymond James, J.P. Morgan and Stifel acted as joint book-running managers for the offering. Goldman Sachs & Co. LLC and Wolfe | Nomura Alliance acted as passive book-runners for the offering.

The shares were offered by Casella pursuant to an automatically effective shelf registration statement (including a prospectus) that was previously filed with the U.S. Securities and Exchange Commission (“SEC”). The offering was made only by means of the written prospectus and prospectus supplement that form a part of the registration statement. A final prospectus supplement relating to the offering was filed with the SEC and is available on the SEC’s website.

Copies of the final prospectus supplement and accompanying prospectus relating to the offering may also be obtained from Raymond James & Associates, Inc., Attention: Equity Syndicate, 880 Carillon Parkway, St. Petersburg, Florida 33716, or by telephone at (800) 248-8863, or by e-mail to prospectus@raymondjames.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by email to prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; or Stifel, Nicolaus & Company, Incorporated, Attention: Syndicate Department, One South Street, 15th Floor, Baltimore, Maryland 21202, or by email to Syndprospectus@stifel.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification of these securities under the securities laws of any such state or jurisdiction.

About Casella Waste Systems, Inc.

Casella Waste Systems, Inc., headquartered in Rutland, Vermont, provides resource management expertise and services to residential, commercial, municipal, institutional and industrial customers, primarily in the areas of solid waste collection and disposal, transfer, recycling and organics services in the eastern United States.

Safe Harbor Statement

Certain matters discussed in this press release, including, among others, our intended use of proceeds from the offering, are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such by the context of the statements, including words such as “believe,” “expect,” “anticipate,” “plan,” “may,” “will,” “would,” “intend,” “estimate,” “guidance” and other similar expressions, whether in the negative or affirmative. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which Casella operates and management’s beliefs and assumptions. Casella cannot guarantee that it actually will achieve the plans, intentions or expectations disclosed in the forward-looking statements made. Such forward-looking statements involve a number of risks and uncertainties, any one or more of which could cause actual results to differ materially from those described in Casella’s forward-looking statements. Additional risks and uncertainties relating to Casella and its business are discussed in the prospectus supplement related to the offering filed with the SEC and in other filings that Casella periodically makes with the SEC. In addition, the forward-looking statements included in this press release represent Casella’s views as of the date of this press release. Casella undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing Casella’s views as of any date subsequent to the date of this press release.

Investors:

Charlie Wohlhuter
Director of Investor Relations
(802) 772-2230

Media:
Jeff Weld
Vice President of Communications
(802) 772-2234

FAQ

How much did Casella Waste Systems (CWST) raise in its recent public offering?

Casella Waste Systems (CWST) raised $517.5 million in gross proceeds from its recent public offering of Class A common stock.

What is the purpose of Casella Waste Systems' (CWST) recent stock offering?

The proceeds from CWST's stock offering will be used to finance the acquisition of Royal Carting and Welsh Sanitation, repay borrowings under its revolving credit facility, and for general corporate purposes.

How many shares did Casella Waste Systems (CWST) sell in its public offering?

Casella Waste Systems (CWST) sold a total of 5,175,000 shares of Class A common stock in its public offering, including the full exercise of the underwriters' option.

What was the price per share for Casella Waste Systems' (CWST) public offering?

The public offering price for Casella Waste Systems' (CWST) Class A common stock was $100.00 per share.