Dive Brief:

• The New York metro area's Action Environmental Group will now operate under the Interstate Waste Services (IWS) brand following the private equity-backed acquisition of Apex Environmental Resources in Ohio. A representative for Connecticut-based Littlejohn & Co.​ confirmed to Waste Dive it now owns a majority stake in IWS.
• News of the Apex landfill sale was initially reported last week by WTOV9, but details of the broader IWS transaction had yet to be announced. The site, served by rail access, is among the largest MSW landfills in the country. Summer Street Capital Partners, an original investor in IWS, and Prophet Equity, majority investor in Apex, will retain "significant equity interests in the business." 
• Michael DiBella, founder of IWS and previously the COO of Action Environmental, will lead the new entity as CEO. Jack Perko, formerly CEO of Curtis Bay Medical Waste Services, recently became COO. Ron Bergamini, formerly CEO of Action, confirmed to Waste Dive he will remain at the company as executive vice president of government relations.  

Dive Insight:

The transaction continues a busy pace for industry consolidation in recent months – including recent new market entries by GFL Environmental and Waste Connections in other regions – and marks the latest turn in a decades-long expansion for IWS. 

This deal makes IWS the largest private vertically-integrated service provider throughout northern New Jersey, New York's Rockland and Orange counties and New York City. The company now operates more than 400 collection vehicles, nearly two dozen transfer or transload facilities and a MRF in the Bronx.

IWS was formed in the late 1990s, following the sale of DiBella Sanitation, and started out in Rockland County. The company's ownership and scale has morphed various times in the years since, with different investors coming in at key inflection points.

Highlights include the company's sale to a private equity firm in 2006 and again to Advanced Disposal Services in 2012. DiBella spit off to acquire New York City's Action Carting in 2007, expanding it with the notable acquisition of Waste Management's local collection assets among other deals. The Action Environmental Group later purchased the original IWS assets from Advanced in 2013 and has completed more than a dozen other regional tuck-ins to grow its footprint.

The move to vertical integration is a major evolution for IWS, especially given the size of the landfill it has now acquired. The Apex site, operational since 2005, accepts more than 1.6 million tons of MSW per year. According to Ohio's Environmental Protection Agency, the site is among a select few that traditionally accepts higher volumes of imported waste than material from within the state. Per data from the U.S. EPA, Apex is projected to close in 2037.

The Apex site will come with some community relations challenges over ongoing odor issues, but the prior ownership had been working with state officials on an accelerated plan for temporary cover and capping of certain areas. Whatever financial factors may arise from that could well be offset by the potential value of vertical integration for IWS, especially heading into a bidding process for commercial waste zones in New York City.

While the non-exclusive model passed by local legislators last fall is different than what Action had advocated for, the company was already viewed as having an advantageous position with the city's largest commercial customer base. Waste Connections is the only other vertically-integrated company currently servicing commercial customers in the city. Waste Management also has multiple transfer stations in the area and could potentially bid for a return to the local collection market.

Meetings about the commercial waste zone process have ramped up this month and New York's Department of Sanitation is expected to issue a request for proposals by late spring.