The U.S. solid waste industry’s five largest publicly traded companies spent an estimated $1.49 billion on acquisitions to start the year, with plenty more activity expected.
The totals include spending reported by WM, Republic Services, Waste Connections, GFL Environmental and Casella Waste Systems.
Below is a recap of M&A activity for each company along with executives’ insights from recent earnings calls about what’s ahead.
| Q1 Acquisition Spend | |
|---|---|
| WM | $7M |
| Republic Services | $826M |
| Waste Connections | $380.4M |
| GFL Environmental* | $173M |
| Casella Waste Systems | $103.6M |
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 May 7 exchange rate.
Recaps and outlooks
WM
The industry’s largest company remains focused on integrating its recent purchase of Stericycle, but is also still pursuing smaller deals. During Q1, it acquired assets worth $11 million in revenue.
CEO Jim Fish said the company has “a very robust pipeline of tuck-in opportunities” and expects “another outsized year of solid waste M&A.” CFO Devina Rankin said the company is on track to close more than $500 million worth of deals this year, with the potential for upward of $125 million in acquired revenue.
She described this as a step change from the company’s usual annual guidance of $100 million to $200 million, due in part to built up opportunities from when the company was most focused on getting regulatory approval to acquire Stericycle.
Following the company’s earnings call, WM confirmed it acquired Maryland-based WB Waste Solutions on May 1 for an undisclosed amount.
Republic Services
Republic’s Q1 spending was largely dedicated to the February purchase of Shamrock Environmental, an industrial waste and wastewater treatment company, from private equity firm CenterOak Partners for an undisclosed sum. It also purchased RecycleSource, a Pittsburgh-area recycler.
CEO Jon Vander Ark said the company is on track to spend at least $1 billion on acquisitions this year. Overall, he said the economy may also be playing a role as “broader uncertainty is probably helpful for us on the margin in terms of M&A” because it “makes people think about taking chips off the table and cashing out on decades of investment.” However, he said this wasn’t generally a big factor in the company’s pipeline.
Following the earnings call, Republic closed another acquisition in Wisconsin on May 1.
Waste Connections
The company reported acquiring three businesses during Q1, with an estimated $125 million in annualized revenue acquired as of late April.
“We’re on pace for another busy year with high levels of seller interest across our footprint. We should be well past an average M&A year by the midpoint of this year,” said CEO Ron Mittelstaedt.
This included Atlantic Coast Recycling, a MRF operator in Passaic, New Jersey, which the company said will complement its growing position in the New York City commercial waste market. While Waste Connections also acquired a local MRF via its purchase of Royal Waste Services last year, Mittelstaedt said the company needed even more capacity.
While Mittelstaedt previously raised concerns about recent changes to federal antitrust review, which have increased the amount of time and information required for approvals, he said this hasn’t affected the company’s pipeline yet because its transactions are generally below the deal threshold of approximately $125 million. According to Mittelstaedt, the company didn’t have any pending deals that met this threshold at the time of the call.
GFL Environmental
All financial information in Canadian dollars
The company reported completing three deals worth an estimated $85 million in annualized revenue during Q1, but expects to ramp up spending now that it’s completed the sale of a stake in its environmental services business.
CEO Patrick Dovigi reiterated that the company is targeting upward of $900 million in spending this year, with the potential for more. He said the company had spent many months developing its pipeline, in anticipation of the proceeds from the recent divestiture.
“The lion's share of what we're working on is tuck-ins into the existing markets, leveraging sort of post-collection assets to drive internalization rates higher, which we think is going to yield the best return on invested capital today,” he said, adding that there weren’t any immediate deals that would be in new markets but there could be “a couple of opportunities” in the future.
Casella Waste Systems
Casella reported acquiring four companies, worth an estimated $50 million in annualized revenue, as of late April. This included three businesses purchased during Q1: Boston-based recycler Save That Stuff and two tuck-in hauling operations in the mid-Atlantic. In April it acquired New York-based Seyrek Disposal.
President Ned Coletta said the company has a pipeline of potential deals worth $500 million in revenue “in various stages of engagement.”
