Before Dan Guimont founded Mill Creek, Washington-based DTG Recycle (DTG), he was the owner and operator of an independent hauling company outside Seattle. One day when looking for a place to dump a truckload filled with residential construction site debris, Guimont pulled up to a local transfer station. As the story goes, the attendant was so rude that Guimont backed his truck off the scale and left out of principle.
While trying to think of where else he could offload the debris, he came to the realization that most of the load was recyclable and could be sold rather than having to pay for it to be landfilled. Armed with a truck and an idea, Guimont decided to start his own C&D recycling business. Rather than build the business from scratch, Guimont contacted Tom Vaughn, who ran his own C&D recycling operation in town, to see if he would be interested in selling his business.
According to Vaughn, the proposition came at an unexpected time.
“I … was riding down the side of a volcano in Hawaii on vacation when I received a call from Dan. I thought to myself, ‘This might be interesting,’ so I pulled over to take the call. He asked if I might be interested in selling my company. I agreed to meet him the next week and we ended up getting the deal done shortly thereafter.”
After running the business solo for the first year and a half, Guimont reached out to Vaughn once again to see if he would be interested in joining the team as CEO. Twenty years later, the pair has helped grow DTG into the largest C&D recycler in the Pacific Northwest.
Inside the business
Today, DTG owns and operates eight material recovery facilities, one C&D debris landfill and associated quarry, one petroleum-contaminated soil treatment facility, and a large transportation division with nearly 1,500 containers and almost 100 trucks.
The company, which employs a staff of 250, specializes in handling C&D material, industrial and manufacturing waste, petroleum-contaminated soil, mattresses, carpet and tires. DTG also has a significant certified destruction business unit. Together, the company receives and processes several thousand tons per day.
Vaughn says the company’s mindset has always been focused on finding innovative ways to divert materials from landfill as a way to “control its destiny.”
“Our philosophy has always been to invest in equipment and processes that are highly flexible so we can rapidly react to evolving end market demands,” Vaughn says. “Also, we have a highly engaged front-line workforce that generates innovative ideas relative to sorting and re-use of recovered commodities. We are continuously involved in research into both separation technologies and end market development. In addition to our continuous internal research and development efforts, we are working with local universities on a number of exciting end product development initiatives.”
Being able to focus on end market development has served the company well in recent years. Even after China stopped accepting many imported recyclables in 2018, the company was well-positioned to serve domestic customers.
“DTG sent recovered commodities to domestic destinations exclusively even before offshore end markets began to close up,” Vaughn says. “The effective closure of China and other countries as viable end markets further galvanized our philosophy to try to control our own destiny whenever possible. We have done this in a number of ways, such as working hard to influence allotment and price in the case of some of our alternative fuels. For other commodities, we have spent a lot of energy developing new products that we can sell directly to the end user and, therefore, eliminate any middlemen control. We have a manufacturer’s mindset of generating a product with consistent specifications and in reliable volumes.”
Vaughn says that an example of this “manufacturer’s mindset” can be seen in how the company has worked to process incoming drywall to make a sellable gypsum-based product. To help better manage its incoming drywall, DTG built a custom drywall grinding machine specifically to produce a high-quality gypsum fertilizer for use in agriculture. He says this investment also allowed DTG to become the largest gypsum recycler in the Pacific Northwest capable of producing over 100 tons per day of gypsum fertilizer from new construction drywall debris.
Besides the fertilizer the company currently produces, Vaughn says the company is also developing other innovative gypsum-based agricultural and building products that will be brought to market in 2020.
Another example of the company’s manufacturer’s mindset is how the company has worked to find uses for plastics. Vaughn says DTG recently launched a clothing brand called Planet Obsessed to help divert usable plastics from landfill. The garments feature upcycled cotton and incorporate polyethylene terephthalate (PET) into the fabric. According to the company, each hoodie Planet Obsessed makes contains the equivalent of eight water bottles worth of plastic.
“Our customers on the recycling end have greeted this product with great enthusiasm,” he says “They are excited to see the real-life demonstration of a circular economy. For DTG, it is another example of controlling the commodity from collection through processing and, ultimately, to incorporation into an end product that can be sold to the end user.”
For the company’s industrial customers, Vaughn says DTG has worked to bridge the gap between producer and consumers of alternative raw materials.
Vaughn says DTG recently facilitated the transfer of several thousand tons of non-hazardous shotblast sand from a painting customer to a manufacturer that was incorporating the sand into an industrial product. Prior to DTG’s involvement, this material had been going to the landfill. However, after DTG got involved, materials were able to be salvaged.
“Both of our customers saved money, and DTG provided the required transportation services so it was beneficial for everyone involved,” Vaughn says. “DTG’s innovation, quality control and logistics capabilities facilitated the ‘closed loop’ nature of the relationship, ensuring an outlet for the waste generator and a source of supply for the user.”
For all the high-level decisions DTG’s executives make, Vaughn says that the company’s commitment to improving its offerings starts with its employees.
He notes that the company encourages an open culture of communication at all levels of the organization with a mantra of “early, loud and often,” meaning that when anyone on the staff notices something that can be improved upon, they are encouraged to speak up to correct the issue.
Vaughn says this directive manifests in sorters giving process improvement suggestions to minimize residual waste, managers working to identify more efficient methods to transport waste from the customer to the company’s MRFs, and the sales team reporting back any challenges customers may be having with a byproduct or incoming waste.
By letting every employee know their voice matters, and by creating opportunities for employees to improve their professional skill sets through various professional development programs the company oversees, Vaughn says that DTG is able to create a culture of teamwork where staff buys in to the company’s overall goal of improving how waste and recyclables are managed throughout their life cycle.
“The net result of this high level of communication throughout our organization is that material is processed through our transportation and processing system in a manner that minimizes the amount of material entering landfill,” Vaughn says.
Onward and upward
On Jan. 20, DTG announced the company closed on a $32 million minority growth equity financing deal from Toronto-based Clairvest in partnership with existing shareholders.
Vaughn says that Clairvest’s experience in the waste industry made the partnership a natural one for the two businesses. This experience quickly paid dividends as the investment banking firm was able to offer support when the COVID-19 pandemic hit Washington especially hard in March.
“Their strategy of backing company founders and their appetite for expansion and innovation aligned well with our entrepreneurial and growth mindset,” he says. “We clinked champagne glasses when we executed the deal in late January, but didn’t realize on the other side of the world a storm was brewing that would bring changes that we never could have envisioned. Fast forward a month and half, and we were facing the COVID-19 crisis. Clairvest immediately marshalled an impressive amount of support for DTG in the form of various consultants, analysts and legal support who helped us navigate the crisis—keeping our team members safe, employed and DTG ready to exit the crisis in an even stronger position.”
The Clairvest deal marked yet another significant milestone for the company after an active 2019. Last year alone, DTG acquired the Anderson Rock & Demolition Pits limited purpose landfill in Yakima, Washington; acquired the Recovery 1 MRF in Tacoma, Washington; and opened two new MRFs in the Seattle-Tacoma region of the state.
Commenting on the Clairvest deal, Guimont says that the company is banking on the private equity firm’s expertise to help continue to grow its scope of operations and pave the way for a potential acquisition by a larger operator interested in leveraging the foundation it has built over the last two decades.
“We have such a massive growth opportunity in front of us at DTG right now, there was never any consideration given to selling,” Guimont says. “During 2018 and 2019, we added a number of facilities organically and via acquisition, but did not want to slow down our growth, so we knew additional equity firepower would be required. … Clairvest has been involved in multiple high-growth environmental companies, many of which were sold to strategic buyers. We are confident they will be able to support our aggressive growth targets and help us shape DTG into a strategic acquisition for a larger environmental company.”