Veolia U.S. Solid Waste Operations Sold to Highstar’s Star Atlantic

Allan Gerlat, News Editor

July 18, 2012

3 Min Read
Veolia U.S. Solid Waste Operations Sold to Highstar’s Star Atlantic

Veolia Environmental Services North America Corp. (VESNA) has agreed to sell its U.S. solid waste operations to Star Atlantic Waste Holdings LP, a unit of New York-based investment firm Highstar Capital, for $1.91 billion, creating the largest privately held waste and recycling business in the United States.

The sale of Veolia ES Solid Waste Inc. is subject to antitrust approval in the United States and is expected to be complete by the end of the year.

An analysis of the deal is examined in a separate story.

Highstar also owns Jacksonville, Fla.-based Advanced Disposal Services Inc. and Interstate Waste Services Inc. of Basking Ridge, N.J. Richard Burke, president and CEO of Chicago-based VESNA, said in a VESNA news release that at closing Veolia operations will be combined with Advanced Disposal and Interstate Waste to form one company, operating as Advanced Disposal Services. The business will include 47 landfills, 92 transfer stations, more than 3,000 trucks and 5,450 employees serving 20 states. "Our solid waste business is self-sustaining, profitable and highly marketable, and the sale makes a significant contribution to the financial well-being of Veolia globally," Burke said.  

Christopher Lee, Highstar Capital founder and managing partner, said the new company will be the largest privately owned environmental services business in the United States with revenues of $1.4 billion. He said in a news release that the acquisition "is a unique opportunity to create a fully-integrated environmental services platform across the eastern United States. The combined business will be a best-in-class company with an exceptional management team and growth opportunities."

Charlie Appleby, CEO of Advanced Disposal, said Veolia ES "is a tremendous business with high-quality employees and assets. The opportunity to select best practices [from the combined companies] will create a strong company with compelling growth prospects."

The sale does not affect VESNA's two other U.S. business units, Veolia ES Technical Solutions and Veolia ES Industrial Services.  VESNA also keeps its Canadian solid waste business, VESNA said. 

Veolia Environnement, the Paris-based parent, said in a news release that the sale will reduce its debt by about $1.82 billion. "This divestment is the second significant step in the execution of the strategic plan laid out last December," said Chairman Antoine Frerot. "The transformation of Veolia is progressing as planned."  In June Veolia sold its water business in the United Kingdom, Veolia Water UK PLC.

Veolia’s U.S. solid waste business had operating income of $110 million and revenue of $818 million in 2011. The operations include 29 landfills, 72 collection operations, 17 recycling facilities and 43 transfer stations, most east of the Mississippi. Overall, Chicago-based VESNA ranked fourth on the Waste Age 100 with 2011 revenue of $1.88 billion and about 9,600 employees.

Veolia announced in December it was putting the U.S. solid waste operations up for sale, as part of a massive restructuring plan to raise $6.7 billion for reducing debt.

Rumors about the Veolia sale have circulated for months. In May VESNA denied published reports that it had selected buyers for the U.S. solid waste operations. Highstar has been rumored to be the leading candidate to buy the operations for weeks.

Star Atlantic has received financing commitments from Deutsche Bank Securities Inc., Macquarie Capital, UBS Investment Bank and Barclays.

About the Author(s)

Allan Gerlat

News Editor, Waste360

Allan Gerlat joined the Waste360 staff in September 2011 as news editor. He was the editor of Waste & Recycling News for the first 16 years of its history, and under his guidance the publication won 27 national and regional awards.

Before Waste & Recycling News, Allan worked at another Crain Communications publication, Rubber & Plastics News, which covers rubber product manufacturing. He began with the publication as associate editor and eventually became managing editor, a position he held for nine years.

Allan is a graduate of Ohio University, where he earned a BS in journalism. He is based in Sagamore Hills, in northeast Ohio.

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