The following report aggregates EBITDA and revenue multiple data pertaining to the sale of private waste management companies in Q1 2024. Our team sourced the data in this report from private equity networks, expert interviews, and proprietary databases. (Sources)
The tables below show average EBITDA and revenue multiples for waste management businesses, broken down by industry subsector as well as EBITDA and revenue range.
EBITDA Multiples for Private Waste Management Companies – 2024
| Subsector | EBITDA Range | ||
| $1-3M | $3-5M | $5-10M | |
| Collection | 6.1x | 7.2x | 7.6x |
| Composting | 4.7x | 5.4x | 6.7x |
| Incineration | 4.3x | 4.9x | 5.6x |
| Landfills | 5.4x | 6.6x | 7.1x |
| Recycling | 5.9x | 6.8x | 7.3x |
| Source Reduction & Reuse | 5.4x | 6x | 6.7x |
| Transportation | 4.9x | 6.1x | 7.7x |
| Waste-to-Energy | 6.5x | 8.7x | 9.5x |
Revenue Multiples for Private Waste Management Companies – 2024
| Subsector | Revenue Range | ||
| $1-5M | $6-10M | $10-50M | |
| Collection | 2.3x | 2.8x | 3.2x |
| Composting | 2.1x | 2.6x | 3x |
| Incineration | 1.7x | 2.1x | 2.5x |
| Landfills | 3.4x | 3.8x | 4.4x |
| Recycling | 3.5x | 3.7x | 4.2x |
| Source Reduction & Reuse | 3.1x | 3.5x | 4x |
| Transportation | 3.4x | 3.8x | 4.6x |
| Waste-to-Energy | 3.9x | 4.7x | 5.1x |
The following section provides a general overview of the state of private waste management M&A as we move further into 2024.
The State of Waste Management M&A in H1 2024
Unlike most industries, which have struggled over the last few years, waste management has seen steady growth, likely due to their status as an essential service. Companies within waste management have steady business leading to consistent revenue streams for owners and private investors. This trend is especially pronounced in the US, which makes up ~12% of global waste production despite having only ~4% of the world’s population.
The following chart depicts the trend of EBITDA multiples for private waste management companies between H1 2020 – H1 2024.
Private Waste Management EBITDA Multiples, H1 2020 – H1 2024
Our interviews with buyers of waste management companies revealed two main areas of concern in their search for prospects: automation and sustainability. With waste management companies increasingly focused on promoting a circular economy through recycling, automation has become more important to acquirers. Automation allows for more efficient sorting, processing, and remanufacturing. Automation is also seen by strategics as a tool to address naturally shrinking workforces in waste management.
Environmental services companies of all kinds are also under pressure to add ESG components to their business for brand purposes. The movement towards ESG compliance is strong enough that many experts project that this trend will continue in waste management even if new legislation is not introduced/passed. However, buyers are more conservative in their attitude towards ESG, expecting it to be a substantive component of the brand should regulations tighten in coming years.
In considering the future of the private waste management M&A market, our analysts forecast the following trends moving further into 2024:
- Facility construction will result in higher multiples: With waste disposal fees increasing as a result of shrinking landfill capacity, multiples for businesses that have waste processing facilities are also going up. But these increases will only last as long as facilities can continue accepting newly-produced waste. Companies that are focused on building out operations, particularly valuable waste-to-energy facilities, will be seen as higher value to buyers.
- PE firms are likely to focus on vertical integration: By rolling up companies specializing in various stages of waste management (e.g. postcollection, transfer stations, material recovery) PE firms are prioritizing comprehensive businesses capable of taking waste materials from A to Z. Companies that expand operations to manage two or more of these processes are likely to find themselves in a favorable position when it comes time to sell.
- Sustainability and automation will continue to have an impact: Waste management buyers want to know that the company they are considering for purchase is operating sustainably and won’t require an expensive pivot over the next 10 years. Companies that leverage automation to improve processes will see greater offers when the company goes to market.
Selling Your Waste Management Company
The intricacies of selling a waste management company can make the process particularly stressful for business owners. As someone who has sold several businesses to private equity and strategic buyers, I have become adament than business owners should have greater transparency as they approach selling their business.
If you are seeking advice as you consider entering the M&A market, I’m happy to speak for a few minutes. You can reach me at the link below or through the contact page on this site.
Sources:
- Driving Factors: 5 Themes are Driving environmental M&A (Waste Today)
- What to Know in Waste & Recycling M&A (Baird)
- Industry Overview Waste Collection Services (Capstone Partners)
- M&A Deal Terms Study (SRS Acquiom)
- Waste Management: A Valuation Perspective (Seeking Alpha)
