Dive Brief:

• Republic Services recently signed a definitive purchase agreement to acquire Minnesota-based Randy's Environmental Services. The Federal Trade Commission approved an early termination of the antitrust review process on Oct. 15.
• Randy's describes itself as the state's largest "independent sanitation company," providing solid waste collection and recycling services in the Twin Cities metro area. Randy's did not respond to a request for comment.
• The company is known in part for offering organics co-collection service, using patented technology from subsidiary Organix Solutions. Republic declined to offer further details on whether that system will continue. "We expect to close in the 4th quarter, and at that time can share more information about our plans. We are excited about the opportunity to welcome Randy’s to the Republic team," said Donna Egan, director of external communications.

Dive Insight:

The deal marks the latest example of ongoing industry consolidation, including many family-owned businesses choosing to sell amid pandemic challenges or tax rate uncertainty ahead of the election, and helps Republic expand in a state where it already has a sizable presence.

According to its website, the acquired company was founded with one truck as Randy's Sanitation by Randy and Sandy Roskowiak in 1979. Over the years, the business grew to involve all of the couple's children, expanding to service commercial and residential accounts throughout the Minneapolis area. The company also offers organics collection service, container rental and document destruction. The Federal Motor Carrier Safety Administration reports Randy's had 165 vehicles as of July.

Beyond the region, Randy's is also known for its multi-purpose MRF in Delano. According to BioCycle, the facility has capacity for 250 tons of single-stream recyclables during the day shift and 150 tons of mixed waste on a second shift. Following early experience offering Hennepin County's first curbside organics recycling program in 2003, Randy's began researching and developing a new co-collection approach it started rolling out in the early 2010s. Randy's customers can place their organics in designated bags and include those bags directly in their trash bins. The bags are then picked out at the MRF and sent to an area composting facility.

In 2017, Randy's COO Jim Wollschlager said this approach scaled well across multiple communities where it provides organics service and reduced truck mileage because a separate route was no longer needed for organics. At the time, the Organix approach received full patent approval along with a sign off from the Minnesota Pollution Control Agency saying the bags would not break when compacted. Randy's also partnered with a robotics company that year to automate the sorting process.

Along with these developments, Organix Solutions has pitched its technology well beyond Minnesota via conferences and meetings with local service providers in numerous states. It captured the attention of long-time industry professionals and analysts, generating speculation a large national player might want to invest in the company or purchase it some day. So far, the concept hasn't gained notable traction outside of its initial proving ground in Minnesota.

While Republic isn't saying whether it plans to continue the co-collection system locally, or possibly scale it to other markets, sources agreed this week the Organix approach is a unique and efficient one that merits further attention. Republic previously highlighted Minnesota as one of the states where it expected to see growing demand for organics service and has ramped up a focus on infrastructure investment recently, largely driven by California's upcoming regulatory requirements. Hennepin County's requirements for certain commercial generators to divert their organics as of this year, and for cities to offer collection or drop-off service by 2022, could be a similarly motivating factor for Republic in Minnesota.

If the Randy's deal closes in the fourth quarter as planned, it will fit into Republic's prior projections of closing $600-650 million worth of acquisitions this year. As of August, $124 million worth of deals had been completed, including a Massachusetts C&D company and an Oregon hauler. Republic's pending acquisition of Tennessee-based Santek Waste Services is expected to be among the largest transactions for the company in 2020.