Dive Brief:

• Macquarie Asset Management confirmed that one of its funds has acquired a majority stake in Florida-based Coastal Waste & Recycling in a recapitalization deal. Coastal CEO Brendon Pantano will continue to lead the company. Financial terms were not disclosed.
• Coastal launched in 2017 and has grown to become one of the industry’s larger private businesses in the Southeast. It operates close to 600 trucks, along with post-collection facilities, to serve an estimated 450,000 customers in Florida and Georgia.
• “Coastal’s leadership in solid waste collections and recycling and focus on a diversion-led business model with high quality service positions the company well to meet the waste management and sustainability expectations of the communities in which Coastal operates,” said Macquarie Infrastructure Partners CEO Karl Kuchel in a statement. “We look forward to partnering with the Coastal management team to support the next stage of the company’s growth.”

Dive Insight:

Private equity investment by Macquarie is often a sign that a company is becoming a major player in its market, and Coastal’s growth story has already caught the attention of many industry leaders.

Coastal was founded in 2017 through a partnership among Pantano, Summer Street Capital Partners and Concentric Equity Partners. Summer Street then teamed up with additional financing partners for a continuation fund in 2021. Macquarie said that Pantano and his management team, along with “a portion of the current shareholders of Coastal,” will retain stakes in the company, but it did not provide further detail.

“I am excited to see Coastal’s next stage of growth and look forward to supporting the management team via my involvement with MAM,” said Brian D’Amico, managing partner at Summer Street, in a statement.

Summer Street’s portfolio also contains other waste companies, such as New Jersey-based Interstate Waste Services and Texas-based Frontier Waste Solutions.

“We are excited to partner with Macquarie Asset Management through this investment into Coastal. With their experience in the space and commitment to providing ongoing capital and specialized support to management teams, we will be able to accelerate our growth in Florida as well as into adjacent geographies,” Pantano said in a statement.

Nomura Greentech acted as Macquarie’s financial advisor in the deal. Houlihan Lokey was lead financial advisor for Coastal, with Brown Gibbons Lang acting as co-financial advisor.

According to Coastal, Pantano is a third-generation descendant of the founders of New York-based Fredonia Sanitary Services, which sold to BFI in 1985. A 2020 Waste Today profile outlined how Pantano’s family stayed involved in the industry; he also worked at companies including Waste Connections. He teamed with Summer Street to grow Coastal into a new private competitor in the Florida market after seeing consolidation by larger companies.

Coastal completed four acquisitions within its first year and has done many more to grow to over 800 employees. It has 11 collection depots and eight post-collection facilities (including transfer stations and recycling facilities with C&D capabilities), with a concentration in southeastern Florida. In addition to providing a range of collection options, it offers portable restroom services.

Boca Raton-based Coastal has multiple contracts and franchise agreements to provide various services for local governments such as Miami-Dade County.

Due to Florida’s expected population growth and other factors, the state is considered an attractive market for many waste and recycling companies. All of the industry’s largest players — WM, Republic Services, Waste Connections and GFL Environmental — have notable presences in various regions of the state, as do Waste Pro, FCC Environmental Services and others.

Following this purchase, Macquarie’s U.S. waste portfolio now includes Washington-based DTG Recycle, California-based GreenWaste, Illinois-based LRS and New Hampshire-based WIN Waste Innovations. Notable prior Macquarie investments include GFL, Waste Industries and WCA Waste.