Founded in 1997, Capital Environmental is an integrated solid waste service company that provides collection, transfer, disposal and recycling services in Canada and the Northeast United States. The company’s growth strategy is to consolidate solid waste operations outside of major cities. Over the years, the company acquired 46 businesses, including 43 collection operations, 11 transfer stations and several recycling operations. The company also operates five landfills, one of which it owns.
Recently the company has undergone a major restructuring. In September, it completed an equity offering of 16.5 million shares at US$2 per share, raising US$33-million. This new stock represents 68 per cent ownership of the company. Following this a new board of directors was elected, led by the new chair David Sutherland-Yoest. This transaction also changed some of the company’s senior credit facilities and waived their defaults.
In December the new ownership group continued to strengthen the management team, appointing four new vice presidents. Also in December, Capital acquired Waste Services Inc. of Ottawa, Ontario for $25.3-million. This will add landfill, collection, and transfer facilities in Ottawa and Brockville, Ontario. In addition, the company purchased a collection operation in Vancouver, British Columbia.
On February 7, Capital announced it raised $30-million through an issue of convertible preferred shares and hired David J. Feals, a veteran of Canadian Waste Services and Waste Management Inc., as its Chief Financial Office.
Hot Sector News
Gundle/SLT Environmental Inc. of Houston, Texas agreed to acquire Serrot International Inc. from Waste Management Inc. for US$30-million, conditional on Gundle arranging $80-million in financing. Both Gundle and Serrot produce geomembrane liner systems for landfills, mining and other applications. On completion the company will have three manufacturing operations in the U.S. (from five combined now) and international manufacturing operations in Canada, Germany, England, Thailand, Egypt, and Ireland. The combined company will also have installation operations in the U.S., England, and Germany. For the first nine months of 2001, Gundle reported revenues of US$127.9-million, while Serrot recorded revenues of US$122.4-million.
Vivendi Environnement of Paris, France recently acquired Depurazioni Industrali, an Italian company that specializes in treating industrial wastewater. Vivendi also received an 84-million Euro contract from Sydney Water Corp. of Australia to improve its water treatment and recycling system. Vivendi also received a $664-million contract to improve water and power systems in northern Morocco.
Scottish Power PLC of the United Kingdom recently announced it has applied to build a 240-megawatt wind farm project near Glasgow, Scotland. If completed, this would be the second largest wind project in the U.K., the largest being British Energy PLC’s 600-megawatt project located off the West Coast of Scotland. Scottish Power plans to be able to generate 400Mw of wind power over the next few years.
General Motors Corp. of Detroit, Michigan and Honda Motor Co. of Tokyo, Japan have agreed to work together to collect used cars for recycling in Europe. This initiative will combine GM’s collection network and Honda’s technology for disassembling and recycling car parts. Starting in July, new regulations for auto-makers to collect scrapped free of charge will be rolled out across Europe.
These articles are based on public sources deemed to be accurate. These articles are designed for information purposes and are not intended as a recommendation of the companies discussed. Individuals looking to invest in this sector should consult an investment advisor before proceeding.
Colin Cieszynski is an investment advisor at Canaccord Capital. Contact Colin at 416-867-4543; fax 416-879-7706; or email Colin_Cieszynski@canaccord.com.