Republic closes Santek acquisition, Slager says farewell
Republic Services President and incoming CEO Jon Vander Ark announced that the Phoenix-based company closed on its acquisition of Cleveland, Tennessee-based Santek Waste Disposal May 5. The announcement came as part of the company’s Q1 earnings call.
“We continue to drive profitable growth and believe that investing in acquisitions with attractive returns is the best use of free cash flow to increase long-term shareholder value,” Vander Ark said. “Earlier today, we closed the acquisition of Santek. We welcome these new employees to the Republic team, and we look forward to integrating these high-quality assets into our business. Our pipeline of acquisition opportunities is strong, and we remain on track to invest at least $600 million in acquisitions for the full year.
“It's unique in the sense that you rarely find an acquisition that has this level of post-collection assets and infrastructure, but we're taking on 11 landfills,” he continued. “I would say that it fits perfectly into our footprint [and] kind of layers into the Southeast, mid-Atlantic [regions]—so part of the country where we've got lots of strong assets and … we pick up a few new communities, as well. So that provides a platform for follow-on M&A and tuck-in deals that allow us to grow further on that front.”
The U.S. Department of Justice (DOJ) announced March 31 that Republic Services would be required to divest waste collection and disposal assets in five states in order to proceed with its acquisition of Santek.
Under an asset preservation stipulation and order filed April 9, New York City-based private-equity firm Kinderhook Industries—with its portfolio companies of Columbia, South Carolina-based Capital Waste Services and Birmingham, Alabama-based EcoSouth—would be the proposed acquirer of Santek’s Rhea County Landfill in Dayton, Tennessee; the Murray County Landfill and Transfer Station in Chatsworth, Georgia; and the Chattanooga Transfer Station in Chattanooga, Tennessee. The proposed divestiture would also include Kinderhook acquiring additional collection facilities and routes in the Southeast.
Additionally, under the proposed divestiture, Waste Connections, Ontario, would acquire certain Texas collection routes from Santek, as well as assets and property associated with the routes.
Vander Ark addressed the drawn-out closing process and required divestitures that came along with the deal.
“[Santek] was a well-run company for a long, long time. It was a protracted close as we went through the DOJ process. I think the pandemic did us no favors just in terms of the process on that front. But the great news is, we came out exactly where we expected,” he said. “We knew that there were going to be some small divestitures associated with that, and we ended up right on our numbers. So, we feel really, really excited about having those team members join our team.”
As part of the earnings call, Republic CEO Don Slager also addressed his forthcoming retirement. He is slated to hand over the reins of the company to Vander Ark June 25 after more than a decade leading the company.
“As you know, next month will be my last as CEO at Republic Services. So, this will be my final quarterly earnings call with the company. … Republic has been tested many times. 2020 was no different,” Slager said.
He continued, “Republic is on solid ground and operating from a position of strength. Republic has plenty of traction, horsepower and motivation. Republic's leadership is proven, aligned and invigorated. Republic's workforce is professional, well-equipped and highly engaged. … I am so very grateful for the opportunity I've had to serve and to lead here at Republic.”
On the call, Vander Ark expressed what Slager’s tenure has meant for the company.
“It is impossible to overstate Don's impact on Republic Services. He is the architect and champion of ‘the Republic Way,’” he said. “Don will always be known as a visionary who successfully integrated the several hundred acquisitions that have formed the current-day Republic. He strengthened Republic's foundation while investing in the capabilities that allow us to drive profitable growth and shareholder value.”
Meridian Waste acquires Eco Waste Services
The acquired assets from Eco Waste Services include a hauling facility in Powdersville, South Carolina, and commercial contracts in Anderson, Cherokee, Laurens, Greenville, Oconee, Pickens and Spartanburg counties. In addition to waste and recycling collection, the acquisition includes new construction site service lines of business for Meridian Waste with portable restrooms, temporary fencing, portable storage and portable offices.
“The Eco Waste acquisition comes on the heels of two other Greenville acquisitions we completed in February 2021. This furthers our ability to maximize efficiencies in the marketplace from an operational scale and disposal optimization standpoint,” Walter “Wally” Hall, CEO of Meridian Waste, says. “The hauling facility acquired as part of the purchase will allow us to consolidate resources obtained in prior acquisitions. We will accomplish critical integration within operations, maintenance and back-office support, allowing us to fast-track our growth in the dynamic Greenville-Spartanburg marketplace.
"We wish to welcome our new team members and customers who are joining us as we uphold the impeccable service that Eco Waste has provided for the last 10 years.”
Former Eco Waste Services owner Gary Seymore and the employees of the organization have transitioned to the Meridian Waste team upon closing of the acquisition.
“On behalf of our Eco Waste family, we’re excited to join the Meridian Waste team,” Seymore says. “We share similar values and the same commitment to quality and excellence. I am confident that together, we can be an even stronger environmental services provider in the Greenville marketplace.”
The terms of the agreement remain private.