UPDATE: May 20, 2022: Republic Services officially closed on its acquisition of JRM Hauling & Recycling, a large Massachusetts hauler and recycler, on May 16.
Dive Brief:
- April 13: Republic Services is acquiring Peabody, Massachusetts-based JRM Hauling & Recycling and affiliated company GreenWorks, according to multiple industry sources and an April 12 letter posted on social media that was shared with Waste Dive. Financial terms have not been disclosed.
- JRM has not responded to requests for comment about the contents of the letter, and Republic declined to comment. A Teamsters representative confirmed discussions have begun about integrating JRM's nonunion workforce into Republic's unionized regional workforce, represented by Local 25.
- "It is with mixed emotions that we are announcing to you today that we have signed an agreement to sell," said JRM President James R. Motzkin and his son, James S. Motzkin, in the letter. The deal is anticipated to close "around mid-May," pending regulatory approval and other conditions.
Dive Insight:
New England, like many other parts of the U.S., has seen M&A activity heating up in recent years as smaller operators look for an exit amid labor constraints and rising costs. JRM has long been considered a prime target if it ever chose to make the move.
According to JRM's website, the company serves residential, commercial and industrial customers throughout states such as Massachusetts, New Hampshire and Rhode Island. Various records indicate JRM has a sizable presence, with more than 350 employees and 300-plus trucks in recent years. Another key feature in the company's portfolio is its GreenWorks MRF. The single-stream facility, which opened in 2015, can process up to 30 tons per hour and is among the largest north of Boston.
JRM was founded in 1995 in Gloucester, Massachusetts, by the Motzkin family and has since expanded to be a sizable regional operation. According to bid documents from one town in the area, JRM was handling more than 25 municipal contracts as of spring 2020. In a sign of how JRM was affected by the pandemic, like many other waste companies across the country, federal records show it received a nearly $5.35 million loan (which has since been forgiven) through the Paycheck Protection Program in 2020.
The Motzkin family is known locally for keeping to itself, even within industry circles, but talk of a potential sale has been circulating for many months.
The April 12 letter indicates this decision came after multiple offers in the past: “While we have often been approached about selling our companies over the years it was not until around the middle of this past year that we gave it serious consideration. Needing to think about our future and our families, the time had come to sincerely consider selling when we were yet again approached.”
While the region has several active acquirers at the moment, Republic is seen as an especially logical fit given its existing transfer station near JRM's base in Peabody, a small city north of Boston. Republic also has a transfer station in Boston as well as a rail transfer site it acquired in the region in 2020, making it one of the better-positioned haulers in terms of local infrastructure. According to past bid documents, JRM generally utilizes disposal facilities run by Covanta and WIN Waste Innovations.
The regional market has also seen several other private companies selling in recent years. Waste Connections has been especially active on the buying side as it expands into the state, with the 2021 acquisition of E.L. Harvey & Sons (which at the time was the state's largest independent hauler) along with the more recent purchases of the sizable ABC Disposal Services (and its affiliated operations) as well as the smaller Nauset Disposal. Private equity-backed WIN Waste has also acquired multiple New England companies in recent years, as has Boston Carting Services.
All of this occurs as Massachusetts and the region see increasing pressure on disposal capacity, which in turn is placing more emphasis on recycling in certain markets. Pending the completion of Republic's JRM acquisition, all nine MRFs in Massachusetts will be owned or operated by publicly traded companies. WM has two (and operates a third that is state-owned), Republic currently has one, Waste Connections has two and Casella Waste Systems has two.
For Republic, which spent $1.06 billion on M&A last year, this deal is just one of many in the works for 2022, and analysts anticipate heightened activity. While the company's pending $2.2 billion purchase of US Ecology will expand its environmental services and hazardous waste offerings, CEO Jon Vander Ark said in a February interview that "you're going to see us grow first and foremost in our traditional business in recycling and solid waste." To that end, the company has also completed solid waste-focused deals in states including Georgia, Illinois, Michigan, Minnesota and New Jersey in recent months.
