Waste & Recycling Market Update – January 2025

Public and Private Sector Consolidation Upholds Waste & Recycling M&A

Capstone’s latest Waste & Recycling Market Update reports that sector players benefited from increased governmental initiatives and heightened public awareness of environmental issues which drove Waste & Recycling market merger and acquisition (M&A) activity in 2024. Demand for disposal services coupled with sustainability needs are driving recycling, composting, and waste-to-energy sales, which in turn is spurring sector expansion.

Liquid Waste subsector M&A is becoming increasingly attractive as public players and private equity firms alike are attracted to the recurring nature of the waste business and the unique expertise required to handle and process waste streams. Additionally, many sector players are focused on sustainability and turning waste streams into profitable new uses. Of note, grease (brown or yellow), commonly collected from restaurants and food service facilities, can be processed and turned into biofuels or used in anaerobic digestion systems to create energy. Septic waste from residential and commercial sources can undergo treatment processes and the resulting biosolids can be converted into fertilizers or energy sources. All of these activities can reduce landfill use and greenhouse gas emissions.

Waste & Recycling market consolidation has increasingly shifted influence toward large waste management companies. These players have grown through municipal contract wins and M&A, diversifying their product offerings, gaining market share and, in many cases, becoming the dominant providers within specific regions. Notably in the Liquid Waste subsector, Veolia (ENXTPA:VIE) was awarded a contract to assume operations of Toronto’s Dufferin organics processing facility (November 2024). Veolia has also operated and maintained Toronto’s other anaerobic digestion facility, providing management for ~130,000 tons of organic waste-to-energy, according to a press release.¹ Global organizations have recognized emissions from food and organic wastes as a leading contributor of greenhouse gasses. Toronto has emerged as a leader in using innovative solutions to address waste byproducts, leveraging partnerships and investing in state-of-the-art facilities. These trends have reduced competition, allowing sector incumbents to set pricing and service standards with limited alternatives for municipalities or commercial clients.

Waste & Recycling M&A volume has moderated year-over-year (YOY) as consolidation efforts across haulers, landfills, and transfer stations buoyed Waste & Recycling market activity in 2024. Niche businesses have also garnered robust valuations as companies seek new offerings, geographies, and waste processing technologies. Private equity buyers targeted the sector in 2024 but remained hesitant to deploy capital to drive incremental value for existing portfolio holdings. Early signs in 2025 point to a rebound in private equity activity, highlighted by Apollo Global Management (NYSE:APO) and BC Partners’ January 2025 announced acquisition of GFL’s Environmental Services business for an enterprise value of $4.3 billion. The acquisition is expected to allow Apollo to diversify into the attractive revenue stream of industrial and waste management services and is expected to help deleverage GFL’s balance sheet.

Also included in this report:

• How waste & recycling M&A multiples have fared as public players enjoy robust share price appreciation.
• What major players have targeted to diversify portfolios, streamline innovation, and capture new geographies.
• A breakdown of activity from private equity buyers in the Liquid Waste Management space, and subsequent sponsor-backed consolidation.

The expert investment banking professionals on Capstone Partners’ Waste & Recycling Team work with leading middle market companies operating in the Waste & Recycling market to advise with their strategic decision-making in order to maximize financial outcomes at every stage of the business lifecycle. Our firm has developed a full suite of corporate finance solutions, including M&A advisory, debt advisory, financial advisory, and equity capital financing to help privately owned businesses and private equity firms address any need, ranging from growth and financial or operational advisement to an ultimate exit transaction. To learn more about the contents of this report, or about the benefits of starting a relationship with our Waste & Recycling Investment Banking Team, contact us.