Macquarie acquires significant stakes in GreenWaste and Zanker in its first waste deal in California

Dive brief:

  • California-based GreenWaste and partner company Zanker Recycling have agreed to sell a large majority of the shares to MIP V Waste, a subsidiary of Macquarie Asset Management, according to several sources. Macquarie declined to comment. Zanker Deferred Questions to GreenWaste, who did not respond to a request for comment.
  • As noted in a recent letter to the Burbank Sanitary District, the current shareholders or partners of GreenWaste Recovery and zanker Road Resource Management will sell its respective interests to MIP V Waste under a recapitalization agreement on undisclosed terms. The deal could be closed by the end of the year.
  • “We really couldn’t have found a stronger, better suited partner who embodies our core values ​​and who is deeply committed to delivering the exceptional services you know and expect, while providing support for our future growth,” said writes the co-author of GreenWaste. – CEO, Tracy Adams, in the September 17 letter, adding that no staff or operational changes are expected.

Dive overview:

The California market is in the midst of a major shift as businesses and jurisdictions prepare to implement statewide organics recycling requirements under SB 1383. GreenWaste already has significant infrastructure in this area, but Macquarie’s investment would position the company to potentially take on an even larger role.

Zanker began in 1985 with the purchase of the Zanker Road idle landfill in San Jose, California for use in recycling operations. GreenWaste was started in 1991 to provide garden waste collection and treatment services in San José. Today, after multiple expansions, the family of companies serves residential and commercial customers throughout Silicon Valley and the central California coast with a network of collection, transfer and processing operations. Because they don’t manage an active landfill, GreenWaste and Zanker often say they are particularly focused on achieving high recycling rates.

The companies are also known for their mixed waste treatment capabilities, and they recently completed major upgrades to a San Jose MRF in 2018. country. In addition, companies are handling large volumes of food and garden waste, and further capacity expansions are planned to meet the needs of the SB 1383, according to BioCycle. Facilities include the Z-Best composting site in Gilroy, Calif., And the Zero Waste Energy Development Co. anaerobic digester in San Jose.

Several companies with operations in California have recently evaluated their acquisitions, in part due to the implementation of SB 1383. In one example, Burrtec Waste Industries’ plan to purchase multiple local carriers was recently reported by . Waste Connections recently completed the purchase of a large company based in Northern California, and several publicly traded companies have sought deals in California, in part to strengthen their organics recycling infrastructure.

Sources say at least one state-owned company was actively suing GreenWaste, but records show Macquarie sealed the deal on August 28 with a letter of agreement. GreenWaste informed municipal customers in the following weeks as a change of control over franchise contracts requires local approval in some cases. The Burbank Sanitary District has confirmed that it expects a final vote on its contract with GreenWaste next week. The transaction is also on the agenda of recent meetings in the Town of Woodside and the Town of Scotts Valley.

Earlier this year, two companies backed by Macquarie – Wheelabrator Technologies and Tunnel Hill Partners – merged into New Hampshire-based WIN Waste Innovations. Macquarie also now has a stake in the Illinois-based company LRS as part of a recent recapitalization. Macquarie’s past investments in the North American waste industry include AOC Waste, Waste Industries and GFL Environmental.

As he indicates in his recent letter, Green Waste is “should remain a stand-alone business entity,” and the sources do not anticipate any potential combinations with other companies in the Macquarie portfolio.

Based on the track record of Macquarie and other private investors in the waste industry, a period of accelerated expansion and acquisitions may soon be in the future for GreenWaste. Macquarie Infrastructure Partners V (the fund behind MIP V Waste) closed with $ 6.9 billion in investments in July and plans to pursue “high-quality infrastructure assets” in several sectors, including waste management. .

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