M&A

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November 1, 2021

Macquarie makes major investment in LRS

LRS, an independent waste diversion, recycling and portable services provider based in Morton Grove, Illinois, announced Sept. 9 that it has completed a significant equity investment to accommodate and scale its growth. The investment was made by Macquarie Infrastructure Partners (MIP) V, an Americas-focused, $6.9 billion unlisted infrastructure fund managed by Sydney-based Macquarie Asset Management (MAM). Financial terms were not disclosed.

According to LRS, the resulting ownership structure will accelerate the company’s growth trajectory and solidify its leadership position as the largest privately held waste, recycling and portable services provider in the Midwest and one of the largest in North America. Additionally, the company says the investment will have no impact on its existing services, operations or executive leadership team.

“At this juncture in our corporate evolution, we couldn’t be more delighted to receive this sizeable investment from MIP V,” LRS CEO Alan Handley says. “With their deep knowledge of the space and the capital and support dedicated to our team, we will be an even more disruptive force in the waste and recycling industry. This partnership will propel our competitive leadership position throughout the Midwest, enable future-focused investments in technological innovation and allow us to continue our rapid growth both organically as well as through M&A.”

Under the banner of the MIP series of funds, MAM-managed funds have invested over $2.9 billion in the waste industry in the Americas since 2007, including investments in Waste Industries, WCA, GFL Environmental, WIN Waste Innovations, Solví and now LRS.

“We are excited to partner with Alan and the rest of the LRS management team in supporting their next stage of growth. MAM has significant experience supporting waste businesses like LRS and invests in people, processes and systems to strengthen existing platforms, support future growth and improve performance,” Paul Mitchener, senior managing director of MAM, says.

The investment follows a year of aggressive growth for LRS, as evidenced by the acquisition of 12 waste, recycling and portable toilet companies in Illinois, Wisconsin, Michigan, Indiana, Minnesota and Iowa. Additionally, the company has experienced significant organic growth through being awarded numerous large municipal contracts, including the entire city of Chicago’s Blue Cart recycling contract.

Since its formation in 2013, LRS has grown from a single location with 200 employees and annual revenues of less than $50 million to a $375 million regional leader in waste diversion and recycling. Handley said LRS’ rapid rise has helped the company compete in municipalities and states throughout the greater Midwest, and the company will continue to seek best-in-class acquisition opportunities.

Goldman Sachs, New York City, served as lead investment banker on the deal; Much Shelist, Chicago, provided legal representation; and Capstone Partners, Boston, led financial advisory services for LRS.

J.P. Morgan, New York City, acted as exclusive financial advisor to MIP V, and White & Case, New York City, acted as legal counsel.

Waste Connections acquires E.L. Harvey

Waste Connections Inc., Ontario, announced Sept. 1 that it has acquired E.L. Harvey & Sons Inc. With a 110-year history dating back four generations, E.L. Harvey is the largest family-owned and -operated solid waste services company in Massachusetts, with total annualized revenue of approximately $110 million.

E.L. Harvey, based in Westborough, Massachusetts, provides solid waste collection, recycling and transfer services to commercial, industrial, municipal and residential customers primarily in central and eastern Massachusetts, as well as southern New Hampshire. The company operates a single-stream material recovery facility that processes 7,000 to 8,000 tons per month and offers confidential document destruction, food waste and product destruction and electronics recycling services. It operates a fleet of 120 collection vehicles.

“The Harvey family has established one of the most respected companies in our industry, and we are honored to welcome Harvey to the Waste Connections family. Together with their continuing leadership team, we look forward to carrying on the Harvey name and further expanding its market position, as well as enhancing its strong culture of support for its employees, customers and communities,” Worthing F. Jackman, president and CEO of Waste Connections, says.

Waste Connections also announced the closing of one of its two previously announced signed acquisitions, with approximately $50 million of annualized revenue from franchise operations in Northern California and Nevada.

GFL acquires PDC

GFL Environmental, Ontario, has acquired Peoria Disposal Co. (PDC), based in Peoria, Illinois.

According to Central Illinois Proud, PDC Municipal Marketing Manager Eric Shangraw confirmed the sale of the company’s landfills, transfer stations and hauling services on Sept. 24. The deal went into effect Oct. 1.

Shangraw said the company’s employees were notified of the sale Sept. 22 and noted that the company’s employees will be retained by GFL. Matt Coulter, a vice president at PDC, will stay with GFL as an area vice president.

Founded in 1928, PDC is a vertically integrated waste management solutions provider operating throughout central Illinois and eastern Missouri. The company’s end-to-end waste management solutions include four solid waste landfills; four transfer stations; a material recovery facility; a RCRA (Resource Conservation and Recovery Act) Part B transfer, storage and disposal facility; a centralized wastewater treatment facility, and 16 transportation terminals that support a fleet of more than 300 collection and hauling vehicles.

Cleveland-based Brown Gibbons Lang & Co.’s Environmental & Industrial Services investment banking team served as the exclusive financial advisor to PDC in the transaction.

“We continue to demonstrate our ability to successfully execute on our growth strategy of pursuing strategic and accretive acquisitions,” GFL founder and CEO Patrick Dovigi says. “The acquisition of PDC provides us with a unique opportunity to acquire one of the best family-owned and -operated vertically integrated set of assets in the United States while expanding our solid waste footprint within the U.S. Midwest. PDC has a leading market position in a secondary market with some of the strongest operating margins in our industry. The acquisition of PDC also provides us with the opportunity to advance our sustainability initiatives by unlocking significant value from landfill gas to energy projects at the PDC landfills, as part of GFL Renewables.”