Danny Ardellini helped build one of North America’s largest waste-disposal companies. Now, the former director of GFL Environmental Inc. is jumping back into the business in Alberta with the first of what’s expected to be a string of takeovers, backed by up to $100-million from former NHL star Paul Coffey and private-equity fund Almada Inc.
Mr. Ardellini, who left GFL in 2010, launched a new venture last month called Environmental 360 Solutions Inc., or E360S. The Toronto-based private company made its first acquisition on Wednesday, purchasing Can Pak Environmental Inc., a family-owned business serving 150,000 customers in cities such as Red Deer, Medicine Hat, Edmonton and Calgary.
E360S plans to grow through acquisitions of privately owned waste-disposal companies, starting in Western Canada and moving through the country and into the United States as opportunities arise. Across North America, private operators pick up approximately 25 per cent of the trash, measured by industry revenue, while public companies account for 55 per cent of revenues. Municipalities and other government-owned operators collect the remainder.
"We have the operational expertise, commitment and capitalization to build a significant player in the North American environmental waste-management industry,” said Mr. Ardellini, president and CEO of E360S. To date, Mr. Ardellini and his backers have put $25-million into the company, and E360S expects to invest up to $100-million on acquisitions and expansion over the next two years.
Mr. Ardellini founded Ontario-based National Waste Services in 2000 by acquiring a single truck, then went on to build a network that collected trash from 400,000 households in Hamilton, Toronto and surrounding municipalities. He sold the business in 2008 to GFL Environmental Inc., one of the country’s largest waste-disposal firms, and served as a director of GFL for two years. In April, private-equity funds BC Partners and the Ontario Teachers' Pension Plan made an investment in GFL that valued the company at $5.1-billion.
There are three major components to the waste-management business – collection, processing and disposal – and as governments and industrial customers place more emphasis on recycling and other environmental measures, the cost of processing and disposing of garbage is rising. Smaller companies, many of which are family owned, are frequently dealing with succession issues at the same time they face declining profit margins and rising costs. Mr. Ardellini said there are “thousands” of companies in this situation – and open to takeover talks. E360S estimates the waste-disposal industry’s revenue will rise across North America by US$10-billion over the next five years to US$80-billion.
Along with its management team, E360S backers include Mr. Coffey, a former NHL all-star with the Edmonton Oilers and a number of other teams. The Stanley Cup-winning defenceman has invested with Mr. Ardellini in other businesses, and is a successful entrepreneur in his own right, including as an owner of auto dealerships.
The other major E360S investor is Toronto-based private equity fund Almada, which is run by former Magna International Inc. executive Alon Ossip and pollster Martin Goldfarb, founder of Goldfarb Intelligence Marketing. Almada was launched last year and has invested approximately $200-million in technology, real estate and aviation finance businesses.