Print
Email
Reprints
Comments
Waste Management Inc.'s recent acquisition of Greenstar Recycling LLC was a unique opportunity to add lots of processing capacity in various parts of the country through a single deal.
Many times these types of larger deals require some sort of sale or consolidation of assets where duplication exists in certain markets.
But William Caesar, president of Waste Management's recycling business, is not viewing this deal with an eye toward automatically closing locations.
"Right now, we're not sure how everything is going to play out. We're going to take 60, 90 days to make sure we understand local market conditions," Caesar said. "Because, as you know, a MRF is a local business. So we're going to have to see what the local market conditions are, make some decisions about what is the right asset footprint in any one of those geographies.
"We'll eventually make decisions about what we want to do, but we're not walking into this saying we're going to close facilities on day one or day 20. We're going to see what it looks like and make decisions. There will still be a lot of synergistic gains from back office combinations. There's plenty of value just from bringing those two things together," he said.
"The fact of the matter is that we've been expanding our asset footprint pretty significantly over the last five years. So I'm more interested in growing the asset footprint than I am about rationalizing assets," Caesar said. "You can't get to 20 million tons by shutting down plants."
Waste Management, back in 2007, came out with a series of environmental goals the company wanted to reach by 2020. They included a desire to just about triple the amount of recyclables each year to 20 million tons.
Last year, the Houston-based company processed 9 million tons, and the Greenstar Recycling assets bring another 1.5 million tons or so to the business. The combined business also now has a total capacity to handle 15 million tons per year.
Greenstar brings to Waste Management locations in Akron, Ohio; Allentown and Pittsburgh, Pa.; Dallas, San Antonio, Houston and Fort Worth, Texas; Oklahoma City and Tulsa, Okla.; Des Moines, Iowa; Howell, Mich.; Kensington, Conn.; Monmouth County and Paterson, N.J.; and Normal, Ill., according to the company's website.
A majority of the material recovery facilities that Greenstar adds to Waste Management – seven of 12 – are located in Texas and Oklahoma, Caesar said. Seven of the 12 sites also are single-stream.
Waste Management paid $180 million to Ireland-based NTR for Greenstar and could pay up to another $40 million in 2018 if "performance criteria" are met, NTR said.
Waste Management also indicated the Greenstar assets will be rebranded.
"Our research indicates clearly that the Waste Management name has much higher recognition and value nationally and in communities locally, so our preference is to operate our recycling services under the Waste Management brand," company spokesman Ken Haldin said in an email interview.
The nation's largest solid waste management company, meanwhile, indicated that it will not continue sponsorship of the Houston Dynamo professional soccer team. The Greenstar name has been on the team's jerseys for the past two seasons and the agreement had about a year to go.
Waste Management, when the Greenstar deal was announced, indicated that the contract was already "paid up" and didn't have any plans to work with the soccer team in the future.
The soccer team announced the deal with the waste and recycling giant was over within one day of the Greenstar's sale.
"Waste Management maintains a single national sports marketing sponsorship – the highly successful Waste Management Phoenix Open. Other WM sports marketing arrangements are localized and scaled differently; this sponsorship doesn't fit with our model," Haldin indicated via email.
"We are sorry to see the relationship end, but happy to have found terms that are beneficial to both parties and cover the Dynamo's financial position," team President Chris Canetti said in a statement. "We had a successful partnership and I am happy we played a key role in Greenstar's growth and ultimate sale."
Greenstar CEO Marcello Figueira, in a statement, called the company's relationship with the Dynamo "excellent and beneficial" during the past two years. Discontinuation of the agreement means Greenstar name will no longer be on team jerseys and merchandise.
The Dynamo, with its Major League Soccer season set to start March 2, is now seeking a new jersey sponsor.
Loading comments...
follow us on:
Follow us on Facebook Follow us on Twitter Subscribe to RSS Feed Subscribe to RSS Feed