Deffenbaugh is being sold to a subsidiary of Waste Management

Waste Management Inc., which has a limited presence in the Kansas City market, expects to become a major local operator with the pending acquisition of Deffenbaugh Disposal Inc.

A subsidiary of Houston-based Waste Management has offered to buy the outstanding stock of Deffenbaugh for an undisclosed sum, according to an announcement by Waste Management and aPriori Capital Partners LP, which is selling Deffenbaugh.

The acquisition is subject to U.S. Department of Justice approval, which is expected in a few months, the companies said.

Deffenbaugh has about 1,000 employees in Kansas City, Topeka, Omaha, St. Joseph and northwest Arkansas. The companies offered no word Tuesday on how employment might change for Deffenbaugh employees.

In addition to its trash-hauling business, Deffenbaugh operates the Johnson County solid waste landfill in Shawnee, a construction and demolition landfill, two material recovery facilities and seven transfer stations.

Competitors in the local disposal business estimate that Deffenbaugh handles 45 percent of the Kansas City area’s waste trade. The other major disposal services that serve residential, commercial and industrial markets in the area include Town & Country Disposal, Republic Services, Ted’s Trash Service, Flynn’s Raytown Disposal and EnviroStar Waste Services.

Deffenbaugh Disposal is the top legal entity that holds the company stock. Under Deffenbaugh Disposal are Deffenbaugh Group Holdings and Deffenbaugh Industries. Deffenbaugh Industries holds the company assets, such as the landfill and the trucks. The sale includes all those assets, but the announcement referred to Deffenbaugh Disposal because that is where the stock resides.

“This proposed acquisition aligns perfectly with our goal of driving shareholder value by maximizing our focus on our core business,” David Steiner, Waste Management’s chief executive, said in a release. “Deffenbaugh’s management team runs a terrific business, and the company’s employees operate it superbly.”

Jim Donahue, Deffenbaugh’s chief executive, said the company is “excited to be joining forces with Waste Management, the largest and most respected name in the industry.”

Susan Schnabel, co-managing partner at aPriori, said Deffenbaugh is an attractive buy, partly because it had modernized its trash-hauling fleet in the last five years, improved efficiency and expanded its business footprint.

Waste Management, which is publicly traded, calls itself the “leading provider of comprehensive waste management services in North America.” Deffenbaugh has been one of the largest privately owned refuse companies in the Midwest.

Deffenbaugh Industries was acquired in 2007 by DLJ Merchant Banking Partners, a private equity investment arm of financial services company Credit Suisse. The purchase price at the time was not disclosed, but industry sources estimated it at $300 million to $350 million.

The company aPriori Capital Partners is a spinoff from Credit Suisse.

The Deffenbaugh enterprise was in the news in August because of the death of the company founder, Ron Deffenbaugh, who began the trash-hauling business in 1957.

This story was originally published October 7, 2014 at 9:58 AM.