Looking to continually grow through acquisitions, Environmental 360 Solutions has made it their goal to create opportunities for owners whose growth has been constrained due to barriers due to capex and bring them in as part of the team where they can unleash their entrepreneurial drive and continue to grow their own businesses.
“Trusted Environmental Management.” That is the slogan and philosophy of Environmental 360 Solutions (E360), a company based out of Toronto, ON that was started in 2018 by Founder, President and CEO Danny Ardellini. With 30 years of experience in the waste business, he started his own hauling company in 2000 called National Waste Services. It grew rapidly until 2010 when it was merged into GFL Environmental as their first hauling company. Ardellini stayed with GFL for a period of time and then retired from the waste industry, thinking that he would never get back into it again. Many people told him, Ardellini recounts, that “the waste industry is in your blood and you’ll get back in.”
They were right. Eight years later, Ardellini saw an opportunity to get involved in the waste industry as he reasoned that small- to medium-sized haulers prefer to deal and work with garbage guys, operators who had built their business from the ground up, not big firms. He started with the goal of acquiring waste companies in September 2018. When he went out to raise money for his new company, he found support from not only a private equity firm Alameda Investments, but also from previous business partners, personal friends and family, including Dave Gurney, Paul Coffey (a Stanley cup winner) and Jason Claxton, who all helped Ardellini get the company going. As a result, E360S made their first acquisition in November 2018 in Red Deer and Medicine Hat, Alberta. It has continued to grow, making acquisitions in Calgary, Alberta, Kelowna, British Columbia, and the Ontario municipalities of Napanee, Sudbury and Kapuskasing. The operations include a mix of liquid, solid and hazardous waste—all of this was accomplished within six months.
“Currently, we have no organic facilities acquisitions under our belt, but we are looking to see if we can acquire one,” says Ardellini. They have also signed multiple municipal collection and processing contracts in Ontario, Alberta and British Columbia. The contract with the City of Kelowna, B.C. officially starts October 1 and will be the company’s first major municipal contract with a full CNG fleet of trucks and a CNG fueling plant at the company’s Kelowna facility. E360S currently serves 150,000 residential customers and 5,100 industrial commercial customers and now has approximately 300 employees and 170 trucks.
Staying Competitive with the Markets
Although raising capital for his new company went smoothly thanks to his previous experience in the waste industry as a successful owner/operator, Ardellini points out that the biggest challenge faced to date has been the bottom falling out of the commodity market, which has impacted the entire recycling world. “On a day-to-day basis we’re evaluating customer pricing and putting new equipment into these recycling facilities to make sure that we are operating as efficiently as possible. Every day we evaluate our customer base and follow the commodity markets to make sure we are getting the proper price increases to offset the decreases in the commodity market.” Currently, E360S has four processing facilities (recycling MRFs)—two in Alberta and two in Ontario—with the processed material staying within these two provincial markets.
Ardellini believes that the recycling commodity market is the industry’s number one challenge today. “Everyone I have talked to is in the same boat. As a company, we have been very fortunate because we have been able to leverage some recycling industry relationships that were established with my previous companies, as well as new relationships through a couple of companies that we acquired. Another challenge right now is educating our customers on the changes to the commodity markets and the reason for pricing changes. As we know, commodity prices are not where they were before, and, honestly, I don’t see them coming back.”
While there have been no major regulatory changes coming down the pipeline, Ardellini explains that the company adjusts as needed, whether it is on the hauling or processing side of the business. When tendering a municipal contract, they do specify the equipment that will be used, such as the fleet of CNG trucks for the City of Kelowna. Corporately, E360S has continuously looked at where they can add CNG trucks to their fleet. “Every time we enter a marketplace or do an acquisition, we do an analysis to see if over time we should change the trucks to CNG and put a CNG fueling station at our facility.”
To date, every time E360S has acquired a company, the owners/operators have stayed on, cashing out a percentage of the equity in their business and rolling the remainder into E360S. Ardellini points out that this is what makes his company’s acquisition offering better for owner/operators than alternatives provided by many of the larger companies. “When the big guys come in, they already have a pre-determined structure in place that usually results in the owner/operator and key staff leaving shortly after they’ve been acquired. However, with all of our acquisitions to date, a percentage of the owner’s equity is acquired, and they stay on, rolling the remainder of their equity into E360S so we can grow their business and our entire company together. For these smaller companies, it is very hard to get financing from banks as the waste business is very capital intensive, so we take all of that capex pressure away from them and allow them to concentrate on building their business. We update their operations with the most up-to-date processes and systems and inject the required capital to grow their business profitably. And if they have unique waste industry expertise, we work with the owner/operator to roll their expertise throughout the entire company so that all of our divisions can offer these new services to their markets.”
When integrating a new acquisition into the company, E360S has an extensive integration checklist and works closely with the owner/operator to make sure that their company goes through an orderly re-branding and that the staff is familiar with the new processes and systems that are being implemented. E360S also works closely with the newly acquired company’s management and staff so that they learn and adopt the E360S set of core values and philosophy of building the business. “We apply our corporate values and E360S brand bullseye of trusted environmental management into every acquisition we make,” noted Ardellini.
E360S is looking to continually grow and have started advertising that the company is actively looking for companies to acquire and share in their vision and overall growth. “With our first acquisitions completed, we now have owners/operators who are on board with us and are excited to be part of our team. They’re thrilled to speak to new acquisition prospects to let them know what a great experience they’ve had rolling their business into E360S. Before that, we had just been cold calling and talking to people to see if they were interested in selling and moving forward, but now we have several under our belt and every acquisition has been doing very well. Now, we are ready to expand across the border and look at different business opportunities in the U.S. and make this company a North American company. Our goal is to find our first, great acquisition into the U.S. that already has the proper infrastructure in place so we can grow and build on that. While industry regulations would, in some instances, be different, at the end of the day we are collecting all categories of waste for ICI customers and for municipalities and we are processing recycling. All the fundamentals are the same,” says Ardellini. Currently, his goal is to do one acquisition per month, continuing to create opportunities for owners whose growth has been constrained due to barriers to capex and bringing them in as part of the team where they can unleash their entrepreneurial drive and continue to grow their businesses.
Integrating and Growing Programs
For E360S, safety is always the first priority. It is no coincidence that the companies they have acquired thus far had great safety programs already in place. While E360S does have health and safety coordinators, they also make sure to work with industry third parties to verify the safety practices of the companies they are looking to acquire. “We make sure that we have the best health and safety practices for every company that we acquire to make sure our safety programs are second to none,” says Ardellini. “As we are now in the hazardous waste and spill business, there is a lot of additional health and safety training in that field, so we are taking the hazardous waste and emergency response training and rolling it out across the whole company.” E360S fields training coordinators and health and safety managers in every operating division. It also has health and safety personnel tasked with attending hazardous job sites to make sure the material and collection procedures are being properly followed at each location.
Community outreach is also part of the company philosophy with E360S always being engaged with the communities they serve, says Ardellini. “It’s instilled in our culture to be active participants in the daily lives of the cities and towns where we are operating. We look forward to sponsoring local teams and charities and making sure that we are always making a positive contribution and giving back.”
Ardellini is very proud of the team that the company has built. Many of the people that worked with him previously in the waste businesses heard he was back in the industry and called him up wanting to be part of the E360S team. “That is a point of pride for me personally,” says Ardellini. Long-term, he is looking to expand into the organic and rubber processing business and to continue growing by acquisitions in a controlled manner, creating value for customers and shareholders, and providing a safe and great working environment for all of the employees. “We are going to continue to acquire companies and grow and see where we can go over the next five to ten years,” Ardellini says. “The companies that we have acquired have all bought into our model and corporate values and, so far, it has all been very positive. We are well managed and have a great team of people that don’t just work 9 to 5; they do whatever it takes to get the job done—all with the purpose of growing the business together and being an integral part of our company vision.” | WA
Company Values and Strategies
• Expert: We have deep experience in waste management. Our leadership team has decades of experience and our knowledge enables us to make the best decisions and find the best solutions we can.
• Innovative: We focus on using the best and latest technology. We use new vehicles and equipment and sophisticated software. Our team embraces leading-edge technology and is constantly trained to use it most effectively. We are leaders who can tackle new waste streams.
• Conscientious: We care about what we do and how we do it. We take a diligent approach and are transparent in everything we do. We are environmental stewards. We are health and safety focused.
• Friendly: We are respectful to everyone: to our employees, to our customers and to the communities we serve. We address service challenges.
• Can-Do: We approach all our tasks with a positive attitude. We are flexible and solution- oriented.
• Operational Excellence: We have an excellent track record. We know how to deliver efficiently and effectively. We can tackle new waste streams. We are leaders in the industry and are members of industry associations.
• Growth-Oriented: We are a growing company. We are a proactive organization that takes growth seriously. We know how to build greenfield operations and implement acquisitions and make them work.
• Well-Capitalized: This is a capital-intensive business. Capitalization is a competitive advantage that we maintain.
• Best Technology: We have the best and latest technology. We deploy new vehicles and equipment. We use sophisticated software, including logistics.
• Environmentally Focused: We are environmental stewards. Our solutions are the best possible for the environment. Our goal is to keep as much as possible out of the ground.
• Health and Safety: Health and Safety dominate our thinking and drive our behavior every single day. They are core to our culture. Everyone is trained on our processes and procedures. Our employees know and live the health and safety manual and must stay aware of updates. Our employees earn safety bonuses.
• Employer of Choice: We pride ourselves on the friendly and fun work environment we create. Our employees are committed because of our leading technology, training and fair wages. They are excited to be part of a growing team.
• Customer Focused: The Customer is always right. We do what we can to meet the needs of our customers. We make our municipal and ICI customers’ jobs easier.
• Community Focused: We care about the communities we serve. We respect the people in these communities and work to help them resolve garbage and recycling issues.
• Full-Service: We are one company that manages all waste. We do all the steps from pick-up to recycling and landfill.
• Cost-Effective: We give the best price we can to our customers. We manage our costs effectively, including our preventative maintenance program, enabling us to deliver on this commitment.
For more information, contact DannyArdellini at [email protected].