Top 40 haulers in North America

Ten years ago, the waste hauling landscape looked far different than it does today.

In the past few years, merger and acquisition (M&A) activity has transformed the sphere, absorbing companies that were once large players and bloating those at the top with healthy revenue growth.

Waste Today’s inaugural Top Hauler List is an attempt to quantify those changes and track the companies still on top based on their revenues. Along with national players, our list features some of the top regional haulers across North America.

While change has occurred, the industry is still in a state of flux. Both waste management companies and private investment firms are buying up hauling businesses regularly thanks to their profitability, a robust economy and ideal selling conditions (read more in “Money moves” on page 48).

This activity has sopped up both smaller and larger waste management companies, some of which would have been on the list had they not been acquired. Advanced Disposal in Ponte Vedra, Florida, for example, was omitted in light of Waste Management's recent acquisition of the company, despite the deal being set to officially close in early 2020. Had it been included, the company would have been No. 8 on our list, with $1.56 billion in revenue in 2018. (For more on our methodology, please see "More about the Top Hauler List" on page 46.)

With M&A activity here to stay, the Top Hauler List could present even more change in just a few years’ time as waste hauling businesses continue to grow, expand on and invest in their fleets, and weigh the risks on the best time to buy and sell.

Money moves

In 2016, M&A activity began picking up in a way that hasn’t slowed down since.

While this has included high-profile transactions, such as Waste Management’s recent acquisition of Advanced Disposal, much of it is composed of the mom-and-pop haulers who found the timing right to sell.

It’s a market that’s nearly doubled in pace since 2017 thanks an ideal combination of factors, says Michael Hoffman, the managing director and group head of diversified industrials at Stifel Financial Corp. in Baltimore.

The U.S. economy typically moves in five-year cycles, peaking in the fifth year and then contracting back to a period of slowdown. Five years after the recession of 2009, though, the economy was still expanding with no indication of a slowdown in sight. The housing market had recovered, landfill volumes were improving and inflation had started to pick up. But savvy business owners knew a recession was somewhere on the horizon.

Then, national tax reform passed in 2017, driving up capital and equipment costs for companies. At the same time, the ongoing labor shortage operators face today was just coming into clear view as a long-term issue.

For those who were thinking of selling their companies already, it created the perfect conditions to let go while making a profit.

Hoffman says there are five D’s owners consider in business succession planning: descendance, death, divorce, disability and disease.

“If you had a descendant issue, and you’re looking out and thinking about the recession and coming out of that … the timing would be perfect,” Hoffman says.

Waste hauling companies and private investment firms alike have taken advantage of the long economic cycle. This year alone:

• GFL Environmental of Ontario, Canada, announced two acquisitions within a week in July: The Soil Safe group of companies of Columbia, Maryland, and Canada Fibers Ltd. of Toronto, Canada.
• Waste Management was approved to acquire Advanced Disposal of Ponte Vedra, Florida, in June.
• In June, US Ecology of Boise, Idaho, merged with NRC Group Holdings Corp., a Houston-based provider of compliance and waste management services to the marine and rail transportation, general industrial and energy industries.
• GFL acquired Bestway Disposal of Colorado Springs, Colorado, in March.
• Waste Industries of Raleigh, North Carolina, acquired Coastal Ladies Carting Inc. in March.
• Macquarie Infrastructure and Real Assets of New York announced its acquisition of Tunnel Hill Partners of Stamford, Connecticut, in February.

These acquisitions come on the heels of a strong year for M&A activity, which included GFL’s merger with Waste Industries in November 2018.

It’s activity that has changed the hauling landscape significantly in the past five years, eliminating numerous smaller companies and taking haulers out of the equation that would otherwise be major players. And Hoffman doesn’t anticipate that pace slowing anytime soon.

“I think this could be a much longer cycle than everyone thinks it could be,” Hoffman says.

Waste companies are experiencing a high point in stock values, with Houston-based Waste Management Inc.’s stock rising in value more than threefold since the end of 2011 and Phoenix-based Republic Service’s stock value rising by two-and-a-half times in the same time period, according to Bloomberg. It’s created the right conditions for GFL to file for an initial public offering (IPO) that would be the largest in Canada in five years.

With ongoing economic expansion, waste haulers are continuing to focus on M&A activity for the remainder of the year.

“In the second quarter [of 2019], we invested $129 million in acquisitions to further enhance our leading market position and drive growth in free cash flow. Our currency pipeline continues to be strong,” said Don Slager, CEO of Republic Services, during an investor call July 25. “As a result, we now expect to invest approximately $550 million in acquisitions this year.”

Hoffman is predicting a mild recession within the next couple years, but he doesn’t anticipate it being one that will slow M&A activity significantly.

“I don’t see anything that would disrupt it,” Hoffman says.

The author is the assistant editor for Waste Today and can be contacted at tcottom@gie.net.