One of the nation’s fastest-growing counties is also home to a quickly expanding regional hauler with support from multiple veteran investors. Following a recent acquisition, South Carolina’s Pro Disposal is hoping to capitalize on that growth while managing a tight geographic focus.
Founded in 2006 by President Alex Cano with just two roll-off containers and one truck, the company is based in Ridgeland, South Carolina. It services customers as far north as Charleston and as far south as Savannah, Georgia.
Jeff Kendall, managing director at Laurel Mountain Partners, came on as an investor in 2020 and brought in Comerica Bank as a partner. This summer, Ironwood Capital also made an investment in the company to support the acquisitions of Carolina Containers of Beaufort and Barnwell Resources.
Dickson Suit, a partner at Ironwood who already served on Pro’s board prior to the new investment, said that was a “pivotal” move for the company because it brought in new vertical integration opportunities. He described Cano as a “tremendous” operator who was “very customer focused.”
While Pro already owned one transfer station in Beaufort County permitted for 500 tons per day, as well as the Appleton Landfill in Allendale County that is permitted for 21,000 tons per year, the new assets significantly expand its operations and are closer to key markets.
The Carolina Containers transfer station in Jasper County brings in another 500 tons per day of permitted capacity and the Barnwell Resources landfill in Beaufort County is permitted for 156,000 tons per year. The Barnwell site had an estimated 38 years of capacity left in 2021 — more than double the capacity at Appleton — according to the most recent South Carolina Department of Health and Environmental Control report.
Following the transactions, Kendall estimates that Pro has “roughly quadrupled our sales in two years” while significantly boosting earnings, and is seeing growth of 25% or more per year in every product line. Pro currently has more than 80 trucks offering a range of collection types (subscription residential, front load commercial and roll-off) as well as portable restroom services.
In addition to the bigger city markets, Pro is also focused on areas such as Bluffton, Beaufort and Hilton Head in South Carolina. Cano and his investors view local competitors as reasonable in terms of pricing, which has allowed them to sustainably compete in the market.
“We do a lot of work on the islands and the different communities in plantations where we're the preferred hauler probably in 50% of the communities. We probably have about 70% of Hilton Head island on a subscription basis,” said Cano.
Pro uses split-body trucks for collection on Hilton Head, with recyclables going to a nearby WM MRF. At the moment, Pro doesn’t anticipate investing in its own processing infrastructure.
Jasper County (which includes Hilton Head) was the third fastest-growing county in the U.S. from July 2020 to July 2021 and Cano said this is playing out through volumes.
“It's a beautiful area for people to come here and retire,” he said. “I think that we definitely benefit on the C&D side, but our goal is to — after the home is built, or while the home is built — get their residential cart to make it more of a permanent transaction. A lot of commercial work is happening too, because all the people moving here need to eat places and they need to go to the doctor.”
This is a textbook cycle often touted by financial analysts and industry competitors about how economic growth is a boon for haulers. Pro’s team said they’re continually investing to make the most of it. Kendall noted the company’s average truck age is around three years old, and as soon as new containers or carts come in they’re often sent out quickly. The company has also a new headquarters, including a truck yard and maintenance shop in Ridgeland, and may add other yards in Charleston or Savannah in the future.
In terms of labor, Cano said the usual recruitment challenges are a factor in his market, but Pro is finding ways to compete with unspecified high-end pay and benefits.
“We're hiring a lot more of the veterans that are coming from the the larger companies to move over and work with us and we're growing tremendously in the area.”
Looking ahead, Pro and its investors see potential for more organic growth in its current markets and will be building a bigger sales team. Other acquisitions are also expected, but with a targeted focus.
”We're not really looking to go way far afield, we're not going to Pennsylvania or necessarily Florida. Our focuses would be more in the tri-state area — North Carolina, South Carolina, Georgia — initially,” said Kendall. “There are a lot of advantages to not being hither and yon, and over the years I've learned to prefer staying pretty dense where you are. You want to build high margins, free cash flow.”
While Pro left the door open for a broader expansion, the group repeatedly emphasized that they plan to take a controlled approach to growth — at least for as long as possible.
“This is a little bit like holding a bronco back,” said Kendall, noting at the same time that “we don't want to lose the flavor of the local, family company.”