Capstone Headwaters, a Boston-based independent investment banking firm, released its Q1 Waste & Recycling Executive Summary April 27. The executive summary reports that merger and acquisition (M&A) activity in the waste and recycling industry increased 48 percent in the first quarter, with nearly 35 percent of deals in the environmental services (consulting, waste technologies, and equipment) segment. Private equity firms accounted for 46.5 percent of total announced or completed deal volume.
While many recycling programs are halted and commercial waste volumes have declined as the COVID-19 pandemic has shuttered businesses across the country, the report predicts that operators that serve residential and medical waste markets are poised to weather the storm without any significant disruptions to cash flows. However, Capstone says that the uncertainty in the global marketplace has prompted active buyers to increase deal selectiveness, while maintaining an appetite for businesses that generate steady cash flows, display recessionary resilience and sustain strong balance sheets.
The report shows that there were 15 completed M&A deals in the environmental services sector in the first quarter, nine in the liquid waste sector, seven in traditional collection, five in recycling, five vertically integrated deals and two in hazardous waste.
The full Q1 Waste & Recycling Executive Summary is available online.