Dive Brief:

• Waste Connections is acquiring three Northern California haulers, according to multiple sources and public records, adding Garden City Sanitation, Milpitas Sanitation and Livermore Sanitation to its portfolio. Waste Connections declined to comment. Garden City President Louie Pellegrini, a co-owner of each business, did not respond to a request for comment.
• The sales of Garden City and Milpitas closed earlier this month. A spokesperson for the city of Milpitas, California, confirmed its franchise collection contract had been transferred to Waste Connections. San Jose, California, where Garden City is one of multiple franchise haulers, did not respond to a request for comment.
• The sale of Livermore Sanitation is still pending, as the city of Livermore, California, hasn’t yet approved the transfer of its franchise hauling agreement. The city’s public works manager said the matter hasn’t been brought before the Livermore City Council yet and declined to comment otherwise.

Dive Insight:

Waste Connections, which got its start in California more than 20 years ago, already has a sizable presence in the region. These transactions fit with the company’s focus on West Coast franchise markets; they will be integrated into existing operations that serve portions of the broader San Francisco Bay Area, according to a city report.

As is often the case with deals involving long-term franchise agreements, these transactions have been in the works for many months. State records show Waste Connections created property holding companies for Garden City and Livermore late last year, and the city of Milpitas was first notified last fall.

According to a 2021 consultant report prepared for Milpitas, Waste Connections planned to complete a purchase of ownership shares rather than an asset purchase agreement and intended to maintain similar daily operations.

The acquired companies will report to a division vice president who oversees the company’s Potrero Hills Landfill in Solano County, California, and the Green Team hauling operation, which has a franchise collection agreement for portions of San Jose. 

As of September 2020, the three companies combined had 191 employees. All three have frontline employees represented by various Teamsters unions, and that will continue.

Industry veteran Pellegrini has a stake in these three and numerous other waste companies, alongside other partners. The transaction does not include related businesses such as Alameda County Industries or Mission Trail Waste Systems.

While the co-owners of these three companies have an extensive, multigenerational background in California’s waste industry, the companies being acquired are all relatively new. They provide a range of waste, recycling and organics collection services for residential and commercial accounts, centered on key municipal contracts.

Garden City Sanitation was formed to bid on a 2007 collection contract in San Jose and is one of multiple franchise haulers for that city’s residential waste, as is Waste Connections’ Green Team. Waste Connections acquired Green Team (of which Pellegrini was also a founder) from GreenWaste Recovery in 2003.

Livermore Sanitation was formed to bid on a 2010 collection and processing contract, including residential and commercial waste, in Livermore. Garden City recently received a 15-year extension to its franchise agreement in San Jose; Livermore received a 10-year extension. Milpitas Sanitation was formed in 2016 to bid on a similar long-term contract in that city.

These deals are the latest competitive shift in the region, following the sale of GreenWaste to a division of Macquarie Asset Management last year. California, like many parts of the country, has seen multiple recent waste and recycling acquisitions, and more are anticipated.

During its Aug. 3 earnings call, Waste Connections reported closing 12 deals to date in 2022 worth $245 million in annualized revenue. According to CEO Worthing Jackman, those included “West Coast franchises as well as new market entries and tuck-ins spread across competitive markets in the U.S. and in Canada.”

The company said in the call it expected expects to close deals worth an estimated $225 million in annualized revenue during the third quarter.

This story has been updated to include comment from the city of Livermore.