Why Work with Ironwood Capital
We know Environmental Services.
We believe the Environmental Services space represents an ideal opportunity to partner private capital with proven management teams to achieve excellent outcomes. The industry is comprised of a series of sub-categories, each with its own unique characteristics. Because we understand the industry and many of these sub-categories, we can be quick and flexible in underwriting and structuring transactions that lead to long-term relationships with our portfolio companies.
- The Ironwood Capital team has more than two decades of investment experience in the Environmental Services sector.
- Our experience offers management teams and business owners a combination of intelligent capital and strategic advisory expertise.
- We invest non-control capital in the form of subordinated debt and preferred stock in amounts ranging from $5 million to $30 million.
- We work with companies within the Environmental Services sector to support business owners and financial sponsors in growth financings, full and partial recapitalizations, generational transitions and buyouts.
- We work with a diverse group of businesses in the sector, including solid waste hauling and recycling companies, medical waste collection and disposal companies and integrated environmental service companies that serve residential, commercial and industrial customers.
If your company meets our Environmental Services investment criteria, please contact us:
- REVENUES: $20 million to $250 million
- EBITDA: $3 million to $15 million, with margins of 10% or better
- MANAGEMENT TEAMS: Proven management teams with a significant equity stake
- COMPETITIVE ADVANTAGES: Growing market share with sustainable margins
- CAPITAL STRUCTURE: Adequate liquidity, capitalized for growth
- STABILITY: Three years of positive EBITDA with strong forward visibility
- CASH FLOW DIVERSIFICATION: By customer, product line and channel
Case Study: Integrated Environmental Services Company
A non-hazardous solid waste collection, recycling and disposal operator servicing a major metropolitan region needed capital to double the size of its business. Management wanted to extend its geographic footprint and also expand capacity through the acquisition of a large competitor and construction of state of the art infrastructure.
Ironwood recognized the potential of the company’s densely-populated service area and was impressed with its outstanding management team. Our own Environmental Services team believed this opportunity would make an excellent platform portfolio company. Beginning in 2007, we worked with company leadership to identify a finance director and an acting chief financial officer. The Ironwood Capital team also coordinated with the company’s senior lender to structure a credit facility to fund the acquisition and planned expansion.
Despite some initial profitability challenges for the company due to the severe market contraction in 2008/2009, Ironwood was steadfast in its support and flexible when appropriate, interceding with senior lenders at key points and providing additional junior capital, allowing management to focus on running the company. During this time, Dickson Suit, head of Ironwood Capital’s Environmental Services team, worked closely with company leaders in his capacity as board member to assess strategic acquisition opportunities and craft expansion plans.
In 2010, Ironwood leveraged its extensive relationships to source an equity sponsor which allowed the company to execute on a second large, transformative acquisition. Following that acquisition, Ironwood led successful recruiting efforts for a permanent chief financial officer and an expert sales consultant to augment the management team, improve profitability and enhance the sales organization.
In 2012, Ironwood sourced a senior subordinated debt lender to provide additional capital for strategic initiatives. This group later provided a large unitranche facility to refinance the company’s balance sheet. Additional acquisitions followed, improving the company’s route density and margins.
Ironwood’s financial investments, paired with active board involvement and expert advisory services, provided key support to the business during a challenging time in the company’s history. Over the course of several years Ironwood provided modeling and other financial support, leading to successful capital raises used to finance multiple major acquisitions and tuck-in opportunities. Ironwood provided the first institutional capital to the business and played an active role in evaluating strategic initiatives and acquisitions, ultimately positioning the company as a leading integrated environmental services business supported by a state of the art infrastructure. Company revenues grew 10 times over from our initial involvement to our successful exit in 2017.
Benefits Derived from Mezzanine Capital
Mezzanine capital allows business owners to achieve their objectives, without giving up control. The benefits of mezzanine include:
- Patient Capital: No amortization allows for reinvestment in growth
- Long-term horizon: Typical investment horizon of 5+ years
- Flexible use of proceeds: Including “chips off the table”
- Less dilutive or non-dilutive: Less dilutive than an equity-only solution
- Improved bankability: Banks view institutional junior capital favorably
Representative Environmental Services Investments
|Leading provider of solid waste management and recycling collection services||Growth Financing|
|Established provider of solid waste collection, disposal and recycling||Growth Financing|
|Medical waste collection and disposal company||Buyout|
|Non-hazardous solid waste management services offering a complete range of integrated services to residential, commercial and industrial customers||Growth Financing|
|Solid waste company providing non-hazardous solid waste collection and disposal services||Buyout|
|A leading solid waste management and recycling company specializing in residential, commercial and industrial solid waste collection, hauling and landfill management||Recapitalization|
|Specialist in railcar cleaning and waste management services||Growth Financing|