REFILE-UPDATE 2-Waste Connections to buy Canada's Progressive Waste for $2.67 bln

(Adds dropped word "last" in paragraph 4)
By Ankit Ajmera
Jan 19 (Reuters) - U.S.-based Waste Connections Inc WCN.N
is buying Canada's Progressive Waste Solutions Ltd BIN.TO for
about $2.67 billion in a deal that will make the combination the
third-biggest waste management services provider in North
America.
The all-stock deal, structured as a reverse merger, will
allow Waste Connections to move its tax domicile to Canada with
its shareholders owning about 70 pct of the combined company.
The transaction is the latest in a string of deals where
U.S. companies have acquired foreign companies through reverse
mergers to avoid higher tax rates at home.
The $24.55 per share offer represents a premium of 4.4
percent to the last closing price of Progressive Waste's
U.S.-listed stock.
Waste Connections's shares were up 7 pct at $54.48 in early
trading on Tuesday, while Progressive Waste's U.S.-listed stock
rose 8.3 percent to $25.52.
With proforma revenue of about $4.1 billion, the combination
will command a market share of about 7 percent, Barclays (L:BARC) analyst
Jon Windham wrote in a note to clients.
The combined company and its larger rivals - Waste
Management Inc WM.N and Republic Services Inc (N:RSG) RSG.N - will
corner nearly half of the market share of the North American
waste disposal market, the analyst said.
Windham, however, said he did not expect "significant
regulatory hurdles" to the deal.
Waste Connections, which has operations only in the United
States, has few overlapping markets with Canada's Progressive
Waste. The Canadian company gets about 63 percent of its annual
revenue from the United States and the rest from Canada.
The combined company will be led by Waste Connections's
current management team.
The deal will result in more than $625 million of adjusted
free-cash flow generation for the combined company in the first
year from tax-effected synergies, capital expenditure discipline
and other cash flow benefits.
Progressive Waste, whose U.S. shares have fallen 20 percent
in the past 12 months, had put itself up for sale earlier this
month.
Waste Connections also said it expects to report revenue of
$531.9 million and adjusted profit of 48 cents per share for the
fourth quarter ended Dec. 31.
Analysts on average had expected fourth-quarter earnings of
47 cents per share on revenue $521 million, according to Thomson
Reuters I/B/E/S.
Morgan Stanley (N:MS), Stifel Nicolaus, Bank of America (N:BAC) Merrill
Lynch and Wells Fargo (N:WFC) Securities LLC were financial advisers to
Waste Connections. JPMorgan (N:JPM) Securities and BMO Capital Markets
advised Progressive Waste.