Action Environmental Services
The Company
Action Carting Environmental Services, Inc. is the largest independent provider of non-hazardous solid waste management services, including collection, disposal and recycling, throughout New York City’s five boroughs. The company services commercial businesses including hotels, retail chains, office buildings, medical facilities, professional sports stadiums and restaurants. Action also operates a state-of-the-art materials recovery facility, which is used to process fiber, plastic and metal.
The Situation
Republic Services, Inc. elected to divest certain transfer station assets and hauling operations within the New York City marketplace. Action viewed these assets as highly strategic and complementary to its existing operations. Management believed such an acquisition would distinguish Action as the largest waste management provider in its served market. However, such an acquisition would require significant outside capital.
The Quarton Difference
Given management’s desire to acquire the Republic assets and continue its roll up strategy with numerous identified tuck-in opportunities, Action retained the principals of Quarton to raise and optimally structure the various tranches of capital necessary to continue its aggressive growth initiatives. This capital raising effort included arranging a three bank syndicate, mezzanine financing and preferred equity; with the mission critical objective to minimize ownership dilution to existing shareholders. In addition, this capital raising effort occurred during the height of the recent credit crisis.
The Result
The principals of Quarton leveraged their substantial waste experience to advise Action on this transformative acquisition, which effectively doubled the size of the company. By acquiring these assets from Republic, Action is now positioned as the foremost, environmentally friendly collection and recycling provider in New York City. At the same time, the financing provided sufficient dry powder to further pursue subsequent growth initiatives and met the stated objective to minimize shareholder dilution.
