Allied Waste Industries to acquire Laidlaw solid waste management operations.

SCOTTSDALE, ARIZONA--(BUSINESS WIRE)--September 18, 1996--

Transaction valued at approximately $1.5 billion

-- Will Create No.4 Company In Solid Waste Management Industry --

-- Expected to be Accretive to 1997 Earnings --

Allied Waste Industries, Inc. (NASDAQ:AWIN) announced today that it has signed a definitive agreement to acquire the solid waste management operations of Laidlaw Inc., the Toronto-based provider of environmental and transportation services, for approximately $1.5 billion in cash, stock and notes. As a result of the acquisition, Allied Waste is expected to become the fourth largest solid waste company, with combined annual 1996 revenues of $1 billion, and a leading market presence in 23 states and seven Canadian provinces. The combined company will have 49 landfills with almost one billion gate yards of permitted airspace, 115 collection locations and 29 transfer stations.

Under terms of the agreement, Laidlaw will receive $1.2 billion in cash, a $150 million (face amount) 7%, 12-year subordinated debenture, a $168 million (face amount) 12-year zero coupon subordinated note, 14.6 million shares of Allied Waste common stock and 20.4 million warrants. Upon completion of the transaction, Laidlaw will hold about 20 percent of Allied common shares then outstanding.

Allied has received commitments from Goldman, Sachs & Co., Credit Suisse and Citibank for a $1.2 billion bank credit facility, as well as a highly confident letter from Goldman Sachs and Citibank for a $475 million senior subordinated debt offering to finance the cash consideration paid to Laidlaw, refinance existing Allied debt and provide for future working capital and acquisition financing requirements. Goldman, Sachs & Co. served as advisor to Allied on the transaction.

Based on the anticipated contribution of the Laidlaw operations, Allied Waste expects the transaction to be accretive to earnings per share in 1997 and beyond. Allied said that after completion of the integration of the two businesses, it expects the combination will generate more than $60 million in pre-tax cost savings and synergies.

"The acquisition of Laidlaw's North American solid waste management operations will, in one step, place Allied Waste among the industry's leading companies," said Roger A. Ramsey, Chairman and Chief Executive Officer of Allied Waste Industries, Inc. "We believe the strategic combination of Allied and Laidlaw's operations will create significantly greater opportunities for growth and rewards for Allied shareholders."

James Bullock, President and CEO of Laidlaw Inc., said, "This transaction will allow our solid waste operations to become part of a highly skilled, rapidly growing company focused solely on solid waste management, while enabling Laidlaw to focus on growth opportunities in our various environmental and transportation service businesses. Allied has a strong track record in managing growth through acquisition and integration of operations in individual markets. We look forward to participating in the new company's growth potential as a significant equity holder."

"In those markets where existing Allied and Laidlaw operations offer compelling growth prospects, we will seek to enhance efficiencies by making additional acquisitions and taking related steps to integrate additional waste volumes into current processing and transfer facilities and landfills," said Thomas H. Van Weelden, President and Chief Operating Officer of Allied Waste.

The transaction has been approved by the Boards of Directors of both companies, and is expected to be consummated by early 1997. It is subject to a vote of Allied's shareholders and standard regulatory approvals. Laidlaw will name two directors to Allied's Board of Directors, expanding it to 12 members.

The 20.4 million warrants paid to Laidlaw are not exercisable by Laidlaw except upon a change of control at Allied. However, Laidlaw may transfer the warrants to other parties, who may exercise them.

Laidlaw Waste Systems operates in 18 states and seven Canadian provinces. Serving customers from 140 locations, it provides hauling services from 73 locations, recycling from 31 facilities and operates 29 landfills, seven of which are in Canada.

Allied Waste Industries, Inc., which is headquartered in Scottsdale, Arizona, is a vertically integrated solid waste management company providing non-hazardous waste collection, transfer, recycling and disposal services to more than 395,000 residential and commercial customers located primarily in the midwestern, southwestern and southern U.S. The Company currently conducts its operations through 42 collection companies, 23 transfer stations, 9 recycling facilities and 20 landfills located in 12 states. Allied's current run rate of revenues and operating cash flow is $250 million and $73 million, respectively.

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