Waste & Recycling – March 2021

Capstone’s March 2021 Waste & Recycling Update reports that EBITDA multiples of large public waste and recycling companies have returned to pre-pandemic levels driven by sustained demand for waste management and recycling services during the pandemic and recent increases in commercial and residential waste volumes. However, waste and recycling companies continue to face operational challenges due to staffing limitations and social distancing requirements. While merger and acquisition (M&A) activity decreased by 23.1% in 2020 year-over-year (YOY), Capstone expects transaction volume to increase in 2021 as companies continue to consolidate.

Included in this Report:

• Resurgences in economic activity have increased non-residential waste volume, heightening demand for commercial waste services.
• Private equity add-on deals made up 37.8% of 2020 deal volume as private equity firms have adopted a buy-and-build strategy to bolster the geographic reach of platform investments.
• Strategic public buyers composed 27.3% of total 2020 transactions as smaller industry participants were consolidated by large public companies.