Dive Brief:
- Closed Loop Private Equity acquired Agri-Cycle, an organics management company serving 850 commercial and industrial clients in 14 U.S. states, it announced on Wednesday.
- Closed Loop Partners, which advances circular economy solutions through separate research and private equity arms, has made investments in more than 80 companies over the last decade. Its capital management division received a funding infusion from Capricorn Investment Group in February.
- Founded in Maine in 2013, Agri-Cycle has positioned itself as a solution for states with organics diversion mandates, like Maine, New Hampshire, Vermont and Massachusetts. The company began as a food waste collection service, bringing material from its customers to on-farm anaerobic digesters run by a separate entity.
Dive Insight:
Food waste management is a potentially $110 billion market, according to research from nonprofit ReFed. Closed Loop has identified the sector as a "key focus area for the firm," which has also invested in plastics, packaging and textile recycling.
Last year, research supported by Closed Loop Partners identified sluggish growth in the organics processing industry between 2018 and 2023, and it called for additional investment to spur growth.
Circular Services, Closed Loop Partners' private recycling and circular economy services provider, acquired Quantum Organics in February. The company runs an anaerobic digestion and composting facility in Southington, Connecticut, in an area where towns are increasingly seeking to divert organic waste. That acquisition will remain separate from Agri-Cycle.
Closed Loop intends for the Agri-Cycle acquisition to fuel its plan to aggressively expand into the food waste management market. This would occur through both internal growth mechanisms and acquisitions.
"Closed Loop Partners is proud to back Agri-Cycle, and partner with their management team to accelerate their path to scale and drive meaningful impact for organics circularity in the U.S. Through this acquisition, we can together capture the significant market opportunity for food and organic waste diversion in the U.S.,” Jackson Pei, co-head of Closed Loop Private Equity, said in a statement.
Agri-Cycle was the first organics company in the Northeast to install a food waste depackager in 2015. With the technology, the company was able to help regional grocery chain Hannaford divert 100% of its food waste from landfill, reducing the chain’s hauling costs by about 40% as of 2021.
Today, Agri-Cycle services 2,400 locations across its footprint, providing education, collection, processing and disposal service to its customers.
“Agri-Cycle has provided services to keep thousands of tons of food in circulation over the last decade,” Dan Bell, CEO of Agri-Cycle, said in a statement. “As the organics waste challenge grows more urgent, we look to continue meeting market demand, and work alongside Closed Loop Partners to accelerate impact at scale.”
