The leading publicly traded solid waste companies closed out another outsized year of acquisitions in 2022, with an estimated $6.27 billion in spending on dozens of deals throughout the U.S. and Canada
This figure includes spending reported by WM, Republic Services, Waste Connections, GFL Environmental and Casella Waste Systems and is far above those same companies’ estimated $4.21 billion in acquisition spending during 2021. Republic Services’ $2.2 billion purchase of US Ecology was the largest deal included in the 2022 totals. Private equity buyers were also a dominant force in 2022, but spending totals are not often publicly reported in that category.
Catch up on how spending shifted among each company as well as what executives said about 2023 activity during recent quarterly earnings calls.
| 2022 Spend* | Year-Over-Year Change | 2022 Annualized Revenue Acquired | |
|---|---|---|---|
| WM | $377M | +$302M | $258M |
| Republic Services | $2.67B | +1.62B | Not officially reported |
| Waste Connections | $2.21B | +$1.25B | $640M |
| GFL Environmental** | $938M | -$759.7M | $351.2M |
| Casella Waste Systems | $78.2M | -$92.5M | $51M |
*Spending totals are net of cash acquired.
**GFL figures converted from Canadian to U.S. dollars for comparison purposes, based on Dec. 31 exchange rate.
2023 outlooks
WM
Projected Spending: $100M-200M, which is the company’s usual guidance
CFO Devina Rankin said the company “will continue to be opportunistic in pursuing the right deals at the right price,” and CEO Jim Fish said he preferred investing in sustainability opportunities with more guaranteed returns than a deal “where there's some uncertainty about integration.”
Republic Services
Projected Spending: “At least” $500M
Republic will continue to focus on environmental services and solid waste opportunities, but with a selective approach in all categories.
"We're not just buying revenue. We're very particular buyers and we want to get something that's quality. And one of the first questions we always ask is ‘why wouldn't we do this ourselves?’ And if it's something like a residential subscription business or a temporary roll-off business, we should go get that with our sales team, not pay a premium for that,” said CEO Jon Vander Ark. “So we're looking for infrastructure. We're looking for route-based businesses with customer contracts that we know that we will integrate into the business and drive value over time.”
Waste Connections
Projected Spending: Possibly $500M
CEO Worthing Jackman said activity remains robust, with ongoing opportunities in markets that fit with the company’s strategy. “If you look at the pipeline right now, it's still what I would call middle of the fairway,” he said, noting the larger potential transactions are in the $20 million to $40 million revenue range with no “outsized” opportunities at the moment. “It's just sellers of great businesses pick the time to sell and... you've seen more people come to market or finally after 20 years or 30 years of dialogue decide to say, ‘Hey, it's time to sell.’”
GFL Environmental
Projected Spending: $222.3M-370.5M (based on Feb. 22 exchange rate)
CEO Patrick Dovigi said the company will have a more “tempered” approach to M&A this year as it works to focus on optimizing its existing regions with tuck-in deals. The company also plans to divest a sizable number of assets in non-strategic markets.
“We have a pipeline as robust as ever and would anticipate 2024 returning to more historical levels of M&A, but in 2023, we expect a more moderate level of M&A activity while we focus on our other value creation initiatives. It is important to remember that we, like the industry, are coming off a number of banner M&A years with COVID also pulling the timing of some of those deals forward,” he said.
Casella Waste Systems
Projected Spending: Not reported
CEO John Casella said the company expects to close soon on two deals worth $30 million in annualized revenue, but he didn’t specify further plans beyond that.
“Our pipeline remains very robust with over $500 million in revenues of identified opportunities across our existing operating footprint,” he said. “We are currently in the late stages for several acquisitions and expect another year of strong activity.”
