Your Waste Business is Uniquely Valuable

Prepare today to realize a premium value on your terms and timing.

Joe Kondrup

Remember the “shock and awe” pace of acquisitions in waste during the 1970s, 1980s and 1990s? Colorful industry pioneers completed thousands of deals and built industry powerhouses. To this day, the waste industry is in a perpetual state of evolution, and consolidation continues to be a premier strategy for growth. The waste business of the 1970s—now regarded as the environmental services industry—has exponentially grown in complexity and has earned a reputation as one of America’s most sophisticated businesses. It is also widely regarded as one of the most dynamic arenas for merger and acquisition activity.

Whether you own a four-truck collection company or a fully-integrated regional platform with hundreds of employees, you probably have been approached by someone interested in buying your business. For many of you, you’ve probably been called on so often that it’s a nuisance at times. All this action begs the question, why are all these acquisition guys still so eager to buy? Because waste deals make great economic sense for the buyers!

Waste is a business where there are real synergies and economies of scale—bigger means better efficiency and improved profitability. The benefits of integrating collection, recycling, transfer or landfill volumes are powerful economic and strategic factors. Acquisitions, even when the buyer pays a premium value, can be the least expensive, quickest and best way to grow and achieve long-term business objectives. Gaining key people, taking over important contracts and expanding into new geographic areas are powerful motivators for buyers. That’s why the “majors” have armies of corporate “business development” specialists all working to entice you as a seller.

It is impossible for you to know today when the time will be right for you to consider selling your company. It could be next week, next month or years from now. With decades of acquisition activity, and the unending pursuit by the “business development” guys, many private owners figure that when the time comes, there will be a willing buyer waiting in the wings who is prepared to pay top dollar. No doubt the industry has proven that there will probably be a buyer trolling for a deal at any given time, but realizing top dollar is up to you.

As good as most companies are at developing and implementing core operating strategies, these same companies often have short-sighted, one-dimensional plans, or no plan at all, for one of the most valuable elements of their business plan; a defined strategy to maximize business value when the time comes to exit. Unless you have a sound strategy for optimizing value, the reality is that the deck is stacked in the buyer’s favor.

You Will Reap What You Sow

Advance planning and the effort that you invest now is the key. The majors are so good at acquisitions because they work on them every day. They have completed huge numbers of deals and they know who the prospects are, which ones they prefer and why. They also have a pretty good read on your “magic number” having had cocktails with you or sharing the camaraderie of a round of golf or a fishing trip. These aren’t passive activities for them; they are working every day to differentiate themselves, so that when the moment comes that you consider selling, they have the inside track to buy your company. The difference between realizing an ordinary or average deal, and getting a great or fantastic deal, will only come from tipping the scales in your favor.


Formulate your views on what a winning outcome looks like in both economic and personal terms. Layout a road map of key events and milestones that will enable you to realize your goals. Whether the “big event” is months or even years down the road, you’ll need time to process your thoughts and solidify your plan.


Identify those positive factors or attributes that will drive a premium value for your business and any negatives that may cause a buyer to place a lower value on your business. Buyers develop their valuation based on earnings history, consistency, and the future earnings power and market potential of your business. Develop strategies that can be seamlessly (and confidentially) integrated into your core operational, sales, financial or fleet activities. Your strategy for growth, how you track financial performance by profit center, vehicle maintenance cost history by unit, sales effectiveness, safety or productivity are but a few of hundreds of areas that can be enhanced to propel value while featuring your company’s strengths and story most persuasively.


You’ve probably seen one of the high-end auto auctions on television. Just like a classic car auction, your business can be primed, detailed and positioned for optimal value. Consider how buyers will look at your company and position yourself in the best possible light. When you portray an image of professionalism, quality and sophistication it will differentiate you from the pack. Buyers are very savvy, so don’t confuse positioning with substance. Positioning is essential and necessary to highlight your tangible and intangible qualities and to powerfully underscore your “TQM” total quality management.


When the time comes, presenting your business in the most powerful and persuasive ways is one of the most important, and often underappreciated, keys to realizing a premium value. Carefully crafting the message, controlling vital business information, properly organizing it, determining who has access to these sensitive trade secrets, and when access is provided is imperative. Think of a Texas hold-em tournament. None of the players know the cards their opponent is holding. Some are dealt up, some down. The sequence of the deal and the cards showing drives the pot up. How and when you deal your cards is remarkably important in driving excitement, intensity and value.


Just like a classic car auction assembles dozens of buyers, you must have a process that gets more than one qualified, motivated and focused bidder involved. Today, there are scores of strategic, financial and niche buyers actively seeking deals in the waste industry. The activity level is really remarkable, although most of it goes unseen. Buyers must be identified and invited to participate in a structured, scheduled and defined competitive process. Don’t count on the fact that the business development guys that routinely call on you will pay you the best price or provide the best terms. Remember they get paid to get the best deal for their organization, not to give you the best deal. Just because they are “good guys” (and they are usually very good guys, who are honest and sincere) they won’t out of the goodness in their hearts pay top dollar, and the relationship you have with them may actually work against you.

The Exit Process

Considering this life decision is a big deal. It is rife with complexity, emotion, personalities and countless variables. More than anything it is an ongoing process that started the day you (or your father or grandfather) founded your company. Selecting an exit point that comes on your schedule, your terms, and realizes a fantastic result can’t be left to chance.

The “exit” process is a continuum, regardless of when the actual event may come. You are probably already doing some of the initial planning and preparation activities. However, at some point your company will immeasurably benefit from the capabilities of a skilled advisor who can heavily tip the scales in your favor. By running a professionally planned, pro-active process, a skilled advisor will help you realize hundreds of thousands or millions more dollars for your company, than if you go it alone or let the chips fall where they may.

The buyer wants to focus you solely on the transaction value and play off of the relationship he’s worked years to cultivate. He wants you to believe that he is “treating you right” and offering the best value. He may be treating you well, but is he doing his absolute best? Has his offer and terms been validated and tested through competition? My Dad used to say to me that “pretty good just ain’t good enough.” Well, pretty good ain’t good enough when it comes to the value of your company.

In addition to the all-important “purchase price” there are a myriad of other factors to consider. These factors pose a veritable Rubik’s cube of complexity and interrelated considerations. Family, tax and estate planning, along with transaction specific factors including: hold-backs, indemnities, revenue guarantees, royalties, earn outs, consulting and employment deals, and dozens of other highly sensitive and hugely valuable variables must be anticipated and resolved. Experience in recognizing and managing these variables is essential in order to deliver the best outcome for your company.

You wouldn’t think twice about hiring accountants for your tax preparation or lawyers for important legal matters. Both qualified professionals, to be sure, but neither your lawyer nor your accountant, have closed hundreds of waste deals. And to be frank, neither have you.

A Defined Strategy

You can deal yourself a winning hand. Put a defined strategy in place, and consider hiring a qualified, experienced and proven advisor well in advance of the “exit” event. Sooner rather than later, you with the help of an advisor, should objectively size up how to enhance and maximize value. The value added efforts you will need to implement simply can’t be accomplished overnight. A premium value will come from methodically managing the optimization efforts, monthly, quarterly and annually as part of your overall business strategy. Remember, the buyers interested in your company complete acquisitions day in and day out—it’s all their business development people do. Don’t go it alone against expert buyers.

There are dozens, of highly capable, motivated and qualified buyers interested in your waste company. With planning, preparation, professionalism and a competitive process, you will realize superior value. If you commit the time and resources now when the time comes, you’ll get the most gold for your garbage business.

Joe Kondrup is Founder and CEO of Catalyst Strategic Advisors. A waste industry veteran and an accomplished merger and acquisition advisor with roots in garbage dating back to the 1970s as a kid throwing trash, he has completed more than 200 transactions within the waste business and several other gritty industries over his career. Joe can be reached at 719-636-2222 or visit