Investors led by Closed Loop Leadership Fund finalize SMR acquisition
The Closed Loop Leadership Fund LP, a private investment fund managed by Closed Loop Partners (CLP), New York City, has led a consortium of investors in acquiring a majority stake in Sims Municipal Recycling (SMR) from Sims Ltd., which remains a minority stakeholder in SMR. The deal was first announced in late December 2021, with the close date originally anticipated for the third quarter of this year.
According to CLP, its acquisition of the 50.46 percent share of SMR for $45.4 million is expected to further modernize circular economy infrastructure and service in the New York-New Jersey Metro region, where SMR operates three recycling facilities, and in Florida where it has one recycling facility. CLP also expects the investment to expand SMR’s operations into new markets.
SMR’s Brooklyn material recovery facility (MRF) is among the largest dual-stream recycling facilities in North America. The company also manages the long-term New York City residential recycling contract. In the New York-New Jersey Metro region, SMR also operates a MRF in Jersey City, New Jersey, two marine transfer stations and a glass aggregate facility.
Jessica Long, chief strategy officer and managing director at CLP, says the company has had a longstanding relationship with SMR. Long will serve as chairperson of the SMR board.
“Closed Loop Partners’ ecosystem of investors—including strategic corporate partners like Nestlé, PepsiCo Beverages North America, Microsoft and Unilever, pension funds, family offices and foundations—are all interested in developing sustainable business models and markets for recycled content, keeping valuable materials out of landfill,” she says. “This investment, coupled with the existing portfolio of Closed Loop Partners’ managed investment funds, will enable SMR to expand its services, accelerating the development of circular economy infrastructure in the United States.”
SMR President Tom Outerbridge says, “We now have an exciting opportunity to combine our strong operating history with Closed Loop Partners’ extensive resources to strengthen circularity for the postconsumer municipal waste stream.”
This acquisition is made possible by a group of investors, including investment funds managed by CLP, such as the Closed Loop Leadership Fund and the Closed Loop Circular Plastics Fund, as well as the Partnership Fund for New York City, among others. This acquisition builds on and complements CLP’s 2019 acquisition of a majority stake in Balcones Resources in the Southwest U.S., which includes Austin among the cities that it services. “[W]e’re excited about companies like Balcones and SMR that can help us meet the needs of fast-growing cities and create the greatest impact,” Long says.
SMR recovers hundreds of thousands of tons of recyclables annually that it sells to mills, smelters, refiners, reclaimers and secondary material processors. Since winning the contract to service the city of New York, SMR has grown to handle more than 600,000 tons of municipal curbside material annually that is collected from more than 10 million people, CLP says.
Expanding access to recycling services and enabling local circular economy manufacturing can help cities and businesses avoid the cost of landfilling products and packaging, according to CLP, while eliminating the greenhouse gas emissions associated with manufacturing using virgin materials and helping create thousands of local jobs.
Casella acquires Northstar Pulp & Paper
Northstar is a leading resource management company based in Springfield, Massachusetts, focused on recycling processing, brokerage services and collection across the Northeast for industrial, institutional and commercial customers. Casella, based in Rutland, Vermont, expects to generate approximately $26 million of annualized revenues from the Northstar acquisition.
“We are very excited about the acquisition of Northstar, as their operations and services will integrate well across our footprint and provide a great opportunity to expand services to customers,” says John W. Casella, chairman and CEO of Casella. “We continue to selectively invest in expanding our resource management services to industrial, institutional and commercial customers as leading organizations strive to reduce their environmental footprint. The Northstar acquisitions fit well with this strategy and gave us a great platform to drive further profitable growth while increasing our resource management services.
“David Goodman and his family have built an outstanding company focused on great customer service, and we are excited for their help and leadership in integrating Northstar and driving future growth,” Casella adds. “We warmly welcome the Northstar employees and customers to Casella and plan to provide the same exceptional services into the future.”
Casella says with the purchase of Northstar, the company has acquired approximately $30 million in annualized revenues year to date in 2022. He notes that Casella’s acquisition pipeline remains “robust” and that he anticipates continued opportunity to increase cash flow across the company’s footprint.