Quest Resource Holding Corp. acquires Green Remedies Waste and Recycling

Quest Resource Holding Corp., an environmental waste and recycling services provider headquartered in The Colony, Texas, recently announced it has acquired the assets of Green Remedies Waste and Recycling Inc. Green Remedies is a provider of independent environmental services located in Elon, North Carolina.

The company says the acquisition is part of Quest’s wholly owned subsidiary, Quest Resource Management Group, and will strengthen its presence across key markets, particularly the multi-family housing segment.

The total consideration of the acquisition at close is $16.2 million, with approximately two thirds of the consideration to be paid in cash at closing and the remaining third to be delivered through a combination of common stock and a subordinated seller note.

An additional 4 to 14 percent of consideration may be earned through an earn out tied to future performance over the next three years. During the trailing twelve month (TTM) period ending on June 30, Green Remedies is estimated to have produced net income of $2.5 million and adjusted EBITDA of $2.8 million, after adjustments for depreciation of $270,000 and interest expense of $30,000. The transaction is expected to be accretive on a free cash flow per share basis.

“Green Remedies will add incremental volume to our existing market verticals and will establish a significant beachhead in the multi-family housing market. Like Quest, they provide waste and recycling services on an ‘asset-light’ basis. They have built very strong customer loyalty and have an impressively strong market presence with national and regional companies headquartered in the southeastern United States,” Quest President and CEO S. Ray Hatch says. “We expect to integrate their vendor network, add their customers to our client management and finance systems, and bring additional value for our entire base of combined customers. We look forward to working with Green Remedies’ very successful and entrepreneurial team as we integrate their organization into Quest.”

“Taking care of our customers is our priority and has been the key to our success. Quest’s strong reputation for providing exceptional service was an important consideration in our decision to join forces,” Green Remedies President and CEO Alan Allred says. “By joining Quest, our customers gain access to our combined larger national, regional and local vendor network and broader scope of services with superb customer support capabilities. I am excited to continue to serve our customers’ needs as part of the Quest management team.”

Dan Friedberg, Quest’s board chairman adds, “Quest is committed to growing long-term shareholder value and to supporting our customers’ sustainability goals. Thanks to the efforts of our entire team, we have built a highly scalable platform that can broadly support the needs of our customers. Our plan continues to focus on growing our existing customer relationships, adding customers organically and acquiring synergistic, customer-oriented companies—all further enabling us to grow our capabilities, profits and service levels.”

The acquisition will be financed primarily from a term loan arranged by Chicago-based Monroe Capital with $11.5 million drawn at closing. In addition, Quest potentially has access to more than $50 million in additional term debt financing, subject to the terms and conditions of the Monroe Capital term loan agreement, through a combination of a delayed draw term loan and an accordion facility to support Quest’s growth plans.

On Nov. 17, Boston-based Capstone Headwaters announced the closing of a senior secured credit facility for Quest Resource Holding Corp. in support of Quest’s acquisition of Green Remedies.