Back in 1997, Pete Ristagno Sr. and his son Pete Ristagno Jr. were both working as rental brokers for a Cleveland-based dumpster company. Citing operational differences, the pair made the decision to jump to a local competitor, but after a month, it became clear they needed to forge their own path.
The father-son duo purchased six roll-off dumpsters, got business cards made and started pounding the pavement looking for customers. After selling the first six jobs, they ordered 10 more containers, then 10 more after that. Just like that, Pete and Pete Container Service was born.
Today, the Cleveland-based company of just under 100 employees has 1,010 roll-off containers for residential, commercial and industrial use and 3,361 front-load containers for permanent commercial service. To haul the trash, construction debris, roofing material, yard waste and other items the company collects, Pete and Pete relies on its fleet of 46 trucks to service the greater Cleveland marketplace. Ristagno Jr. says that roughly 60 percent of the company’s business comes from commercial customers, with 25 percent coming from retail locations and 15 percent coming from industrial customers.
Evolving the business
After building the business organically for more than two decades, Pete and Pete made the strategic decision to acquire Valley View, Ohio-based Boyas Excavating Inc. in July 2019. Boyas Excavating Inc. operates the largest privately held C&D landfill in northeast Ohio, which accepts C&D material, cleanfill, concrete and organic waste.
According to Lisa Ristagno, who runs the day-to-day business along with her husband Pete Ristagno Jr., the familiarity between the companies and their proximity to each other helped grease the skids for the deal.
“Boyas has always been on our radar since Pete Sr. worked for the company back in the 1970s. Additionally, the location of the landfill was right in the heart of an area that is in close proximity to all major innerbelts in the city and only three miles away from Pete and Pete’s location,” she says. “We began dumping at their facility in the ‘90s when we first started the company … and we always kept the door open [for business] with the previous owner. We jumped at the opportunity to buy the business [when it came along] because the available landfill space in our region is rapidly decreasing.”
According to Lisa Ristagno, the deal was a pivotal one for the company, as it allowed for vertical integration of its services.
“It was the next logical step for us,” she says. “We had achieved a level of success on the trucking end of things, and we felt the purchase of the landfill would further complement an already strong foundation. The acquisition put us in a position to keep our dumping cost consistent without having to be at the mercy of the rates set forth by the other landfills. It also gave us the opportunity to continue recycling on a much larger scale, which is critical in today’s environmentally conscious market.”
Post-acquisition, Pete and Pete collects around 6,000 yards of material daily, recycling as much incoming volume as possible. Last year, Pete and Pete and Boyas collectively recycled 49,000 tons of concrete; 4,500 tons of scrap metal; 4 million pounds of cardboard; 35,000 yards of yard waste; 20,000 yards of clean wood; and thousands of yards of brick, block, dirt and asphalt.
The Boyas acquisition also yielded a total of 291 acres of land including the active landfill and inactive landfill space available for future use; machinery including loaders, dozers, compactors, excavators, off-road trucks, screen plants and material sorting plants; as well as all of the incidentals such as copiers, two-way radios and office trailers located on the property.
"We had achieved a level of success on the trucking end of things, and we felt the purchase of the landfill would further complement an already strong foundation.” –Lisa Ristagno
Beyond the tangible assets the company has gained from the acquisition, Lisa Ristagno says the deal has benefited Pete and Pete by allowing it to be more efficient and strategic in its operations.
“Not only will we benefit from the standpoint that our dumping cost will be fixed, we also benefit from the proximity of the landfill to downtown Cleveland and surrounding areas where there is expected to be continued growth. Plus, we hope to see long-term reduction in overall mileage and fuel costs. These synergies will further cement our place in the Cleveland market,” she says. “Additionally, we plan on taking advantage of the property which is rich in natural resources. We are permitted to mine on the property which includes clean sand, blue clay and several varieties of boulders. We will also utilize the organic material that we accept from the public and turn that into various grades of mulch, and we also produce two blends of topsoil, Ball Diamond Clay, as well as crushing concrete to make several different sizes of aggregate.”
Inside the deal
Cleveland-based Brown Gibbons Lang & Company’s (BGL’s) Environmental & Industrial Services team served as the exclusive financial advisor to Pete and Pete for the acquisition and financing of the Boyas deal. Financing for the transaction was provided by Comerica Bank, Huntington Bank and Ironwood Capital. Specific terms of the transaction were not disclosed.
“[BGL Managing Director] Effram Kaplan and the team at BGL were instrumental in this acquisition,” Lisa Ristagno says. “We were incredibly lucky to have a company such as theirs right in our backyard. They really gave us a crash course in determining the value of our business as well as the value of the combined entities. In this line of work, you hit a lot of roadblocks when dealing with conventional banking institutions, whereas BGL led us right to the people that could help this acquisition come to fruition.”
Kaplan says that the strength of the Pete and Pete team and their vision for building the business sets them apart from a lot of other waste industry participants in terms of how they think of their operations.
"For over 20 years, the Ristagno family has built a leading collection business servicing northeast Ohio,” –Joe Ursuy, SVP and department manager of Comerica Bank’s Environmental Services Department
“When you think about Pete and Pete, it’s an entrepreneurial business with an energetic management team that is thinking really creatively and aggressively about building,” Kaplan says. “It is becoming more and more rare to find really interesting opportunities in the municipal solid waste and even C&D waste sector to consolidate because it is a much more consolidated, mature market than the industrial and special waste or liquid waste sectors.
“So, this is one of those gems where you’ve got an ideal team, a long-term vision, ways to monetize waste beyond traditional status quo business models. And that’s what’s so interesting about Pete and Lisa [and this acquisition]—it’s just hard to find these types of situations in the traditional solid waste market where you have an A-plus team that is not trying to focus on their business in a nickel-and-dime way, but instead they’re thinking about long-term growth. It’s a really nice thing to see.”
According to Comerica and Ironwood Capital, the financing terms of the deal made sense because of the complementary nature of the businesses and the strength of Pete and Pete’s leadership team.
“For over 20 years, the Ristagno family has built a leading collection business servicing northeast Ohio,” Joe Ursuy, SVP and department manager of Comerica Bank’s Environmental Services Department, says. “We were immediately impressed with Pete Jr. and Lisa’s vision, market knowledge and enthusiasm. The Boyas strategic acquisition allows the company to substantially expand the site’s recycling capabilities and diversion rates, as well as internalize most if its C&D waste volumes. The Boyas site has tremendous potential, and its excellent location positions it well to serve the greater Cleveland area.”
“For Ironwood, the thesis for the transaction was highly compelling: significant growth potential in a region with strong C&D generation, the proximity of Boyas to Pete and Pete, strategic geographical presence near key interstate routes and intersections, ample and underutilized capacity in a market with shrinking disposal and improved cross-selling synergies. Additionally, Pete and Pete is led by a dynamic husband and wife team who grew up in the business and have the winning combination of intellect, drive and All-American work ethic,” Dickson Suit, managing director of Ironwood Capital, says.
Focusing on recovery
As Lisa and Pete Ristagno Jr. worked to integrate the companies and fully leverage their new assets in the first quarter, the COVID-19 pandemic quickly forced the company to adjust its operations to serve its customers’ shifting needs.
Pete and Pete’s diverse base of customers includes major contractors, hospital systems, businesses, schools and universities throughout the area. When COVID-19 concerns sparked work and school stoppages across the state in mid-March, the company says it sprung into action to aid its client base when they needed it most.
“With regards to COVID-19, ... we implemented all suggested safety measures to ensure the safety of our staff,” Lisa Ristagno says. “Our biggest area affected has been trash removal for restaurants, entertainment venues and bars. We’ve received countless service suspension requests. Although customers are locked into one-year contracts, we allowed customers to suspend their service. Everyone is struggling, and these small businesses are getting hit the hardest. We wanted to do our part in offering some relief. We just hope that everyone can reopen and come back stronger.”
After finalizing the acquisition last year, the company began digging a new landfill cell with the goal of completing it by the middle of this summer. Once finalized, this addition will expand the company’s disposal capacity. And although the company says it will be ready to support whatever hauling and disposal needs its customers require in the future, Pete and Pete’s present focus is on capturing the economics of its first post-acquisition spring/summer season as it waits for a number of its customers to get back to business.
“We are ready to resume normalcy and get back on pace,” Lisa Ristagno says. “I think that, unfortunately, we are going to see some customers not reopen—especially those hit hardest such as restaurants and bars. It’s unfortunate, but the true economic impact of this will not be seen for many months to come. For now, we are staying positive and we have all of our resources plugged in and ready to go as soon as we’re needed.”