Action Environmental and Waste Connections have collectively completed more than a dozen acquisitions in New York this year as the city transitions to a commercial franchise system.
The two companies received more contracts than any others when the city’s Department of Sanitation assigned zones early last year. This was spurred by a 2019 law intended to reform the city’s open market system. Implementation began last fall and is slated to be complete across all 20 zones by the end of 2027.
The trend isn’t unexpected, as M&A in the local market was largely frozen in anticipation of the law’s implementation. But it’s considered a notable outcome for a system that was designed as nonexclusive, with three haulers per zone, to encourage competition. These latest deals include a mix of companies buying others outright, or in many cases buying work from each other in zones where they didn’t win a bid.
New York City’s commercial waste market had 83 licensed carters in 2017, but that number was down to 57 by 2022. In 2024, DSNY awarded contracts to 18 companies and estimated that dozens of others could be left out of the new system unless they chose to become subcontractors.
DSNY set a 15-zone cap for any one hauler, with a goal of up to three haulers per zone, in an effort to maintain competition. Action is near the cap, at 14. Waste Connections hit it following last year’s purchase of Royal Waste & Recycling, leading it to exit one zone. DSNY recently awarded new contracts to small haulers to fill gaps in two zones, one where Waste Connections overlapped with Royal and another that it exited to honor the 15-zone cap.
A public records request indicates the agency contacted prior bidders in September asking them to confirm their interest in future zone contracts, but the list has shrunk since the initial RFP process.
“DSNY reached out to the nine non-awardee carters that remain active in the industry to assess their interest in future commercial waste zone opportunities, and all nine responded with interest,” Press Secretary Vincent Gragnani confirmed via email.
Acting DSNY Commissioner Javier Lojan said in an October interview that if needed the agency “could either draw from existing RFP results or we may conduct an alternative procurement” depending on timing.
Rolling up the market
Following its purchase of Royal, Waste Connections acquired D&D Carting, Cinelli Carting. It also bought routes from Century Waste Services in Manhattan and Brooklyn.
Last week, the company also closed on the purchase of American Recycling.
During a recent earnings call, CEO Ron Mittelstaedt described this then-unspecified purchase as the “largest remaining transfer station in the Queens market.” The facility was permitted for 570 tons of waste per day as of last year, according to DSNY records. The site is adjacent to Royal’s infrastructure in the Jamaica neighborhood.
Last year, Action, a subsidiary of private equity-backed Interstate Waste Services, purchased all assets of Joro Carting and Viking Sanitation. It also bought select work from Bestway Carting in Brooklyn and Manhattan.
This year it acquired Daniello Carting, Diverse Recycling, Falso Carting and Flash Recycling. It also bought select routes from Avid Waste Systems, Basin Haulage, City Waste Services, Evergreen Waste and Liberty Ashes.
Josh Carrero, business manager of Laborers Local 108, said all this activity has added hundreds of new members to his union’s ranks in less than two years. The union now represents an estimated 1,700 people in the industry. This includes certain Action and Waste Connections locations, as well as other companies. Acquisitions present an opportunity to sign up more, such as when Action purchased Viking.
"We actually have grown at least by 400 members,” he said, noting the activity at Action alone means his union will be buying a lot more turkeys this year for an annual Thanksgiving giveaway.
Teamsters Local 813, a key backer of the commercial waste zone law, has seen a similar shift. Local 813 represents workers at various Action and Waste Connections locations. It also organized drivers at zone awardee Cogent Waste Solutions in 2024, though not the helpers.
"We have seen an uptick in hiring in some of the employers that we represent that have been granted zones throughout the city,” said President Daniel Wright.
Wright noted the union is also looking to grow its ranks “through any possible acquisitions that would be made” by member companies in the future.
Integration logistics
At times the integrations can be bumpy, especially in a market known for strong personalities.
Josh Haraf, IWS’ vice president of the New York City market, said that Action now looks to immediately integrate work into existing routes rather than allow certain operations to continue operating separately and integrate over time. This helps avoid service disruptions or related issues.
In another example of complex transaction outcomes, Waste Connections recently sued Century Waste and its owner over an alleged breach of contract following the April transaction to acquire some of the company’s assets.
According to the suit, this came after Century allegedly bid on two New York City Housing Authority contracts during acquisition negotiations and then won the bid despite representing otherwise to Waste Connections. It also allegedly failed to transfer a federal Bureau of Prisons contract to Waste Connections. A federal judge recently denied Century’s motion to dismiss the complaint and the case is ongoing.
Navigating this period between when zone awards are announced and when the specific areas are implemented is also challenging for companies still waiting for a different outcome.
Liverpool Carting, which did not win a desired contract in the Manhattan Northeast zone, is among the companies holding out hope they’ll get a call from DSNY if contracts need to be reshuffled again.
“We're definitely interested in any kind of possibility to stay in business,” said owner Gino Fava. While he’d previously said the company wasn’t for sale, Fava says he’s now open to it "if I got a really good deal" and would consider that option "if and when the day comes when I have to pack it in.”
Any transactions must be approved by the Business Integrity Commission, a city agency designed in part to regulate the commercial waste market, as well as DSNY. The latter agency gained this authority through a new rule that took effect in November, which is similar to legislation introduced in the New York City Council last year.
"This is a long multiyear process that still needs to be implemented and it's very likely that there will be additional transactions that will require Sanitation and others to evaluate whether any changes to the program are warranted,” said David Biderman, a safety consultant who works with local companies.
A public records request to BIC revealed that at least one more zone awardee requested approval for a transfer of ownership in July, with the deal expected to close in the near future, and rumors abound about more deals to come.
