Dive Brief:
- Ecowaste Solutions, the newly created waste and recycling platform backed by private equity fund Kinderhook Investments, announced another acquisition this week: Manhattan, Kansas-based Howie's Enterprises.
- Howie’s Enterprises, a family hauler founded in 1984, serves 15,000 customers in Northeast Kansas with residential and commercial waste collection, roll-off dumpster services and recycling.
- Kinderhook announced the formation of Ecowaste last month. It's a combination of portfolio companies Live Oak Environmental and Cards Recycling, backed by a $1 billion continuation vehicle transaction with Goldman Sachs Alternatives and Apollo S3.
Dive Insight:
Kinderhook announced its acquisition of Louisiana-based Live Oak Environmental in 2021 and acquired Arkansas-based Cards in 2023. Both Cards and Live Oak subsequently grew through dozens of acquisitions.
Over time, the two haulers came to neighbor each other in the Dallas area. Kinderhook was nearing a natural exit point for Live Oak when executives realized the two waste companies could work as a unit, Rob Michalik, managing director at Kinderhook, told Waste Dive.
“That's when it dawned on us that jeez, these businesses could grow really well together,” he said.
Ecowaste brings together assets in the mid-South and Southeast United States. The combined business generates roughly $300 million in annual revenue. It includes a fleet of more than 600 vehicles, 29 hauling yards, nine transfer stations and MRFs and three landfills. Michalik said the business will remain focused on waste and recycling rather than expand into environmental services, as some other large waste companies have done.
Ecowaste's plan is to densify its footprint in the regions it serves, expanding its presence down the Gulf Coast to Houston, and in Kansas, Oklahoma, Louisiana, Arkansas, Missouri and western Alabama. The company’s first acquisitions, announced a few days after the merger, were Gardner Disposal, based in the Kansas City metro area, and Baker Trash Service, based in Tulsa, Oklahoma.
Dustin Reynolds, who was previously CEO of Cards, is the CEO of Ecowaste, which is based in the Dallas suburb of Coppell. Reynolds was not available to discuss the new company, but Michalik credited him with spurring Cards’ rapid growth.
“He's a talented young man, and he has a lot of energy,” Michalik said.
Kinderhook has been active in the waste and recycling space for several years — other recent investments include Colorado-based Apex Waste Solutions and diversified waste company Circon Holdings, which it sold to Covanta, now Reworld. But this is the largest waste-related transaction Kinderhook has closed.
Roughly 40%, or just under $400 million, of the capital raised through Ecowaste's continuation vehicle will be available for organic growth and M&A. Michalik said the provision was unusual but that Ecowaste's backers wanted the dry powder to be able to expand aggressively.
“We anticipate being able to double this business in the next three years, and really see a lot of opportunity,” Michalik said.
Michalik notes the region Ecowaste is focused on is growing in population and still has plenty of independent companies that represent acquisition opportunities. He said Ecowaste’s strategy will be to focus on haulers netting below $10 million in revenue that may be too small for the largest waste companies to target.
Ecowaste Solutions is among the largest examples yet of a private investor bringing in additional capital partners to extend its hold of waste and recycling assets. The industry has received growing attention from such investors looking for stable industries that offer opportunities for growth and consolidation.
Michalik anticipates more such transactions will materialize in the future. He said it would be “healthy” for the industry, enabling the creation of more mid-sized regional companies.
“I think the industry can use more scaled competitors,” Michalik said. “The availability of capital creates more opportunities to do that.”
