Solid waste M&A activity in the second quarter didn’t result in significant spending totals, but Q3 totals are expected to be higher for multiple companies due to larger transactions that closed over the summer.

The Q2 totals include spending reported by WM, Waste Connections, GFL Environmental and Casella Waste Systems in the U.S. and Canada.

Here’s a quick recap about recent M&A activity for the industry’s five largest public companies and what executives said about potential future activity during recent quarterly earnings calls.

Spending totals are net of cash acquired, with some variation in methodology among companies.

*GFL figures converted from Canadian to U.S. dollars for comparison purposes, based on Aug. 6 exchange rate.

Recaps and outlooks

WM

WM completed several acquisitions in the first half of the year, representing $78 million in annualized revenue. Deals announced during Q2 included Patriot Disposal in Arizona, Recycle Capital in Florida and Hometown Haulers in Minnesota, as well as an unspecified transaction in North Carolina. All of these acquisitions are related to WM’s solid waste and recycling businesses.

WM’s strategy is “to make sure that we're filling in white space or buying assets and companies in areas where we see real growth opportunities, and that's why you hear about Arizona, Texas, the Carolinas, Florida, etc.,” Chief Operating Officer John Morris said during the company’s Q2 earnings call.

The company’s overall spending could include “around a billion-plus of tuck-in acquisitions” this year, he added.

Following the close of Q2, WM also disclosed that it spent $550 million on the July 15 purchase of New York-based Winters Bros. Waste Systems. WM continues to work on its planned $7.2 billion acquisition of Stericycle, which the companies say could close as soon as Q4. 

Republic Services

After a busy year of spending in 2023, Republic’s activity has been more limited in 2024. During the company’s July 24 earnings call, CFO Brian DelGhiaccio said it had spent $68 million on deals to date. 

Executives said they’re more focused on solid waste transactions this year, following a series of larger environmental services deals in the past, but still have a pipeline of opportunities in both areas. CEO Jon Vander Ark said the company currently has “more than $300 million of transactions in advanced stages of diligence” that are expected to close this year. 

DelGhiaccio estimated the company would end up spending more than $400 million in total for the year, but could surpass $500 million.

“Sometimes deals hit you and they're in an accelerated fashion,” he said, but usually there is a longer process. “So anything bigger would certainly be at a little bit of a longer timeframe in terms of a close in next year.”

Waste Connections

The company closed five solid waste and recycling deals in Q2, including the purchase of Washington-based Pioneer Recycling Services, as well as one E&P deal in Canada. As of July 25, the company had closed 18 deals worth $500 million in annualized revenue.

CEO Ron Mittelstaedt previewed more to come, saying that “we are positioned for a record year of private company acquisition activity in 2024.” This includes transactions worth another $100 million in annualized revenue in markets on “both the West and the East Coast that are franchise in nature.” Overall, Mittelstaedt said the company could be on track for $700 million in annualized acquired revenue by the end of year due to “high levels of seller interest.”

He speculated that the outcome of this fall’s U.S. elections and next year’s negotiations about the expiration of the former Trump administration’s tax cuts — especially if that involves any change to capital gains taxes — could further influence the M&A landscape.

“Potential increases in capital gains tax have a very material impact on seller psychology and timing,” said Mittelstaedt.

The expectation of an increase in capital gains rates could lead to “quite a bit of accelerated seller activity throughout the back half of ‘24 and throughout ‘25.” If rates are expected to stay the same or go down then there may be less motivation, he said, while adding that the multiples paid for deals could also come down.

“We’ve succeeded in M&A in both environments, in both political administrations, but certainly lower capital gains rate is an incentive to sellers looking to do something,” said Mittelstaedt.

GFL Environmental

GFL completed six transactions through the first half of the year, including two in Q2. The most notable transaction so far this year has been the purchase of Florida-based Angelo’s Recycled Materials, a vertically integrated C&D company, in April. Otherwise, the company has been focused on tuck-ins and trying to reduce its debt leverage. This summer it sold a chunk of Michigan business to Priority Waste as part of the latter goal.

During a recent earnings call, executives said they didn’t anticipate much more notable activity this year but were looking forward to possibly spending as much as $1 billion (Canadian) on deals in 2025. If the potential sale of the company’s environmental solutions business goes through then CEO Patrick Dovigi said “I think you have a lot of flexibility to even take that M&A spend higher.”

“There is a significant amount of M&A and white space within the existing footprint that we have,” said Dovigi, noting “some high-growth markets with a lot of opportunity.”

Casella Waste Systems

The first half of the year started small for Casella, which reported acquiring one business, described as a tuck-in solid waste collection company in its Eastern region. 

After the close of the quarter, Casella announced it had completed four additional acquisitions through Aug. 1. Three of those deals are in the mid-Atlantic region, an area the company is focusing more specifically on now that it has further integrated a previous acquisition from GFL.

The two most notable mid-Atlantic acquisitions are Whitetail Disposal and LMR Disposal, which Casella sees as instrumental in densifying collections in eastern Pennsylvania and western New Jersey. The company estimates the two deals are worth $100 million in annualized revenue.

During an earnings call, executives previewed more deals that could close later this year or in early 2025 throughout the company’s broader footprint. President Ned Coletta said that pipeline “spans many different opportunities from excellent tuck-ins, several million dollars to tens of million dollars of revenue in existing markets to additional adjacencies that will either drive the expansion of the platform or maybe even some level of vertical integration.”