BFI Canada and IESI Corp. Announce $1.1 Billion Transaction

The transaction, which has been approved by the boards of both companies, is expected to be immediately 12 percent accretive to BFI Canada's cash distributions per unit. BFI Canada anticipates that it will increase its annual cash distribution to $1.5708 per unit from $1.4025 following the closing of the transaction.

"The combination with IESI achieves one of BFI Canada's key strategic objectives of establishing a meaningful and profitable presence in the approximately U.S. $42 billion non-hazardous solid waste management industry in the United States," Keith Carrigan, BFI Canada president and CEO, says. "The United States will provide BFI Canada with excellent growth potential given the attractive dynamics of the U.S. non-hazardous solid waste management industry and substantial opportunities for consolidation."

The transaction will substantially increase BFI Canada's market capitalization to more than $1.5 billion (based on the closing unit price as of November 26, 2004), significantly enhancing BFI Canada's liquidity and financial resources. The combined company will have pro forma revenues and EBITDA of $606.3 million and $187.2 million, respectively, for the 12 months ended Sept. 30, 2004. These pro forma results exclude any effect from BFI Canada's acquisition of Complete Disposal Services (CDS), which closed Nov. 19, 2004.

IESI is one of the leading regional, non-hazardous solid waste management companies in the United States, providing collection, transfer, recycling and disposal services in two geographic regions. IESI's southern region consists of Texas, Louisiana, Oklahoma, Arkansas and Missouri. IESI's northeast region encompasses New York, New Jersey, Pennsylvania and Maryland.

"As a result of the transaction, BFI Canada will own one of North America's leading non-hazardous solid waste management businesses with efficient, low-cost operations, high internalization rates, regionally focused operations and strong and growing cash flow characteristics," Carrigan says. "The combined business will benefit from a solid base of exclusive, multi-year municipal solid waste collection contracts that support a predictable revenue stream, as well as improved customer and geographical diversification."

Mickey Flood, IESI founder, president and CEO, says, "We serve more than 560,000 residential and 56,000 commercial and industrial customers in our two regions and are one of the top three service providers in the majority of our principal markets. Like BFI Canada, we have achieved a strong record of financial performance though our vertical integration, focus on achieving high rates of internalization in our market focused operations, and disciplined acquisition strategy."

The core senior management team of BFI Canada will continue to lead the combined business and will be complemented by IESI's experienced management team in the United States. Carrigan will continue as the chief executive officer of the combined business, and Joseph Quarin, current CFO of BFI Canada, will remain in his current role. Mickey Flood, IESI's founder and CEO, will become executive vice president and remain president and CEO of IESI, and Tom Cowee, IESI's CFO, will become vice president of integration.

"The fit between the two businesses is excellent," Carrigan says. "We intend to improve operational efficiencies and profit margins by adopting the best practices of both companies, while pursuing growth both internally and through accretive acquisition opportunities that exist in Canada and the United States. We are very confident that this transaction will create short and long-term value for our unitholders."

Under the Transaction Agreement, the Fund will indirectly acquire 100 percent of the common stock of IESI and BFI Canada and IESI will combine their businesses. The current equity investors in IESI will retain an approximately 39 percent indirect interest in the Fund. The transaction is expected to close on or before Jan. 31, 2005 subject to several conditions, including unitholder approval and the receipt of all necessary regulatory approvals.