On January 2, Rutland, Vt.-based Casella Waste Systems, Inc. completed its acquisition of all of the outstanding stock of integrated solid waste services provider Complete Disposal Company, Inc. and its subsidiary United Material Management of Holyoke, Mass., Inc. for a total consideration of up to $16.5 million.
Complete Disposal, which is expected to generate approximately $17.0 million of revenues in 2018, provides residential and roll-off collection services, operates a construction and demolition processing facility and operates a 750 tons per day solid waste transfer station with both truck and rail transfer capabilities.
“In early August 2017, we announced to the market our updated long-term strategic plan through 2021,” said John W. Casella, chairman and CEO of Casella Waste Systems, in a statement. “As part of this new 2021 plan, and as a result of the recent success of our focus on reducing risk and improving our balance sheet, we are now able to begin to use our capital in a manner that balances continued delivering with smart acquisition and development growth.”
In addition to that acquisition, Casella acquired the commercial and residential collection assets from a hauler in Vermont for a total consideration of up to $1.8 million on December 29, 2017.
“As we have laid out over the last several quarters, given the continued tightening of the disposal markets across the northeast due to permanent facility closures and increased economic activity, coupled with changes in the recycling markets, we believe that we have an excellent opportunity to acquire select assets across our market areas,” said Casella in a statement. “We expect that investing a portion of our excess cash flows to grow our business will create additional shareholder returns through higher cash flow growth rates driven by new revenue streams, internalization to our disposal facilities and cost synergies.”
Casella has set a goal of $20.0 million to $40.0 million per year of acquisition or development activity as part of this new strategy, and it believes that these two recent acquisitions put the company on track to meet its acquisition target in 2018.
“The Complete team has built an exceptional solid waste company that is well regarded by its customers,” said Casella in a statement. “In addition, this acquisition is a great strategic fit with our operations and long-term plan. With this acquisition, we are entering a new adjacent market in Western Massachusetts, enhancing our construction and demolition capabilities with a state-of-the-art processing facility and adding rail and truck transfer capabilities in the Western Massachusetts marketplace that will see another 0.8 million tons of landfill capacity permanently close in 2018. We expect to begin to internalize volumes from this market to our Western New York landfills that have excess annual capacity during 2018.”