Dive Brief:
- Massachusetts-based Vanguard Renewables has entered an agreement to acquire Generate Upcycle’s North American organics recycling operations, effective Oct. 1. This comprises five anaerobic digesters in Ontario and New York.
- The deal will add an estimated 565,000 tons of processing capacity and 1.1 billion cubic feet of renewable natural gas production to Vanguard’s operations, according to a news release. The BlackRock-backed company will have 19 facilities operating or under construction following the transaction.
- Separately, Generate Capital recently sold Upcycle’s seven U.K. facilities to Pinta Energy. This marks the investment firm’s exit from the organic waste business, which it entered in 2016.
Dive Insight:
This deal is a notable expansion for Vanguard, a major North American food waste recycler that started with a focus on farm-based digesters in 2014. While market factors have shifted along the way, Vanguard’s long-term view of organics recycling as a growth opportunity is bearing out.
Vanguard’s portfolio currently includes digesters in Massachusetts, Vermont, Virginia and Wisconsin, as well as separate depackaging facilities in four states.
The company’s pace of growth has accelerated since its sale to BlackRock in 2022, which at the time was said to be valued at approximately $700 million. It now sits in BlackRock’s Global Infrastructure Partners portfolio.
Vanguard’s strategy has evolved over the years to include additional emphasis on collection, depackaging and renewable natural gas offtake agreements.
In 2023, it struck a RNG offtake agreement with AstraZeneca that was said to be the largest open-market deal of its kind. In 2024, it announced the appointment of Mike O’Laughlin as CEO following a variety of executive shifts.
"Landfill diversion represents one of the largest opportunities in the resource recovery market, and scale and integration have become essential to realizing its full potential," said O'Laughlin in a statement about the transaction. “[W]e're creating more recovery pathways for customers, expanding our presence across strategic growth markets in the Northeast and Canada, and providing more reliable, long-term solutions for organic material diversion.”
This is Vanguard’s third acquisition in the past 12 months, following smaller purchases of collection and depackaging companies in Florida and Minnesota.
Vanguard has also been actively pursuing construction opportunities, though it has been less vocal about projections for the number of new facilities to be built. For example, it decided not to pursue a planned project in Georgia earlier this year.
Vanguard currently has 10 new sites in its development pipeline, according to Director of Communications Javier Vargas. This summer, it broke ground on a digester in Litchfield, Minnesota, which will have 300 tons of capacity per day once complete.
In addition to expanding its footprint, the deal also gets Vanguard into Canada’s Clean Fuel Regulations market. Generate Upcycle recently received a loan from that program to expand its London, Ontario, facility and triple RNG production. This is the latest of multiple facility expansion and modernization investments led by Generate Upcycle.
“We have spent the past decade building Upcycle into a scaled organic waste platform with strong businesses across three countries,” said Generate Capital CEO David Crane. “The transactions allow us to recycle capital toward our strategy of delivering reliable power to large energy users in an increasingly constrained grid.”
Generate Capital formally launched Generate Upcycle in 2022 with the acquisition of StormFisher Environmental Services, which developed the London project. Generate also acquired composter Atlas Organics that year, before selling it to Circular Services. It also shuttered a Michigan digester last year following state permitting challenges.
Generate Upcycle is led by President Bill Caesar, who formerly held executive roles at WCA Waste, WM and others. Caesar wasn’t available for comment as of publication about what the transaction means for his role.
