PROPOSED PLAN OF MERGER

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

PROPOSED PLAN OF MERGER

PROPOSED PLAN OF MERGER

On June 3, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Waste Management, Inc., a Delaware corporation (“Parent”) and Stag Merger Sub Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Parent (“Merger Sub”). The Merger Agreement provides that, among other things, at the Effective Time (as defined in the Merger Agreement) and subject to the terms and conditions set forth therein, Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving the Merger (the “Surviving Corporation”) as an indirect wholly-owned subsidiary of Parent.

At the Effective Time, each share of the Company's common stock, par value $0.01 (“Stericycle common stock”), issued and outstanding immediately prior to the Effective Time (other than (i) shares held directly by the Company (including shares held in treasury stock), Parent or Merger Sub or any subsidiary of the Company or Parent (collectively, “Excluded Shares”) and (ii) Dissenting Shares (as defined in the Merger Agreement)), will be converted into the right to receive $62.00 in cash, without interest and less applicable withholding taxes (the “Merger Consideration”).

The closing of the Merger (the “Closing”) is subject to various conditions, including (i) approval of the proposal to adopt the Merger Agreement by the vote of holders of a majority of the voting power represented by outstanding shares of Stericycle common stock (the “stockholder approval”); (ii) the consummation of the Merger not being restrained, enjoined or prohibited by any order (whether temporary, preliminary or permanent) of any governmental entity of competent jurisdiction and no applicable law having been enacted to prohibit or make illegal the consummation of the Merger, in each case, other than an immaterial order or law; (iii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations thereunder (the “HSR Act”), and all waivers, consents, clearances, approvals and authorizations under certain other applicable competition and foreign investment laws having been obtained (or the expiration or termination of any applicable waiting periods thereunder); and (iv) the accuracy of the representations and warranties of the Company, on the one hand, and of Parent and Merger Sub, on the other hand, contained in the Merger Agreement, subject in some instances to materiality or “material adverse effect” qualifiers, as of the date of the Merger Agreement and as of the Closing, and the performance or compliance in all material respects by the Company, on the one hand, and Parent and Merger Sub, on the other hand, of or with their respective covenants and agreements required to be performed or complied with by them under the Merger Agreement on or before the Closing date. The stockholder approval was obtained on August 14, 2024. The Closing conditions in the Merger Agreement with respect to receipt of approval under antitrust and foreign direct investment laws, including expiration of the waiting period under the HSR Act and receipt of antitrust or foreign investment approval in the U.K., Canada, Spain and Portugal, have been satisfied in accordance with the terms and conditions of the Merger Agreement. In addition, the obligation of Parent and Merger Sub to consummate the Merger is subject to the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement) that is continuing. The Closing is not subject to a financing condition. Under the terms of the Merger Agreement, consummation of the Merger will occur as soon as possible, but in any event no later than three business days after the satisfaction or waiver of all of the applicable conditions to the Closing. The board of directors of the Company (the “Board”) has unanimously approved the Merger and the Merger Agreement. Until the Closing, the Company will continue to operate as an independent public company.

The Company has incurred and expects to continue to incur certain significant costs relating to the Merger, such as legal, accounting, financial advisory, printing and other professional services fees, as well as other customary payments. During the three and nine months ended, September 30, 2024, in connection with the Merger, Stericycle incurred approximately $3.4 million and $11.6 million, respectively, of transaction-related expenses, reported in SG&A. In the event that the Merger is terminated, the Company may also be required under the Merger Agreement under certain circumstances to pay a termination fee to Parent of $175.0 million, or may be entitled to receive a termination fee of $262.5 million from Parent.