Gold Medal pursues new type of vertical integration with Apple Valley deal
Waste Dive: Changing the paradigm of the waste industry
Wednesday, December 12th 2018
Dive Brief:
• Gold Medal Group's recent acquisition of Apple Valley Waste (AVW), with the backing of owners Kinderhook Industries and BioHiTech Global, has created a growing force in the Mid-Atlantic region. AVW comes with an additional stake in the Entsorga West Virginia mechanical biological treatment facility, which is currently under construction.
• AVW also comes with 130 trucks and a recently constructed Maryland MRF. Gold Medal will now have operations in Pennsylvania, New Jersey, Maryland, Virginia and West Virginia — and major new market entries, including Baltimore and Washington, D.C.
• The former CEO and COO of AVW will be leaving, but the vast majority of employees are expected to stay on due to minimal market overlap. "[T]hey’re really going to help us achieve that long-term goal of being the first 'zero waste' to landfill environmental business the industry," Michael Schmidt, EVP of strategic growth and development at Gold Medal, told Waste Dive in an interview.
Dive Insight:
Gold Medal Group was created earlier this year after private equity firm Kinderhook Industries and BioHiTech Global partnered to purchase the New Jersey company Gold Medal Services. Their stated goal at the time was to change it into "a technology-driven sustainable waste services provider." In August, the new Gold Medal acquired two companies that owned the Envirowaste facility in Philadelphia. That LEED-certified site can process both C&D and MSW material for recycling.
While Gold Medal has already been focusing on diversion alternatives through multiple MRFs and on-site digester offerings, this latest Apple Valley deal is expected to take it to a whole new level by further expanding ownership in the Entsorga project.
"It’s not just a traditional roll-up of a waste company," said Schmidt of the AVW deal. “It’s a roll-up of a waste company that’s going to help change the paradigm of the industry."
As planned, the Entsorga facility is expected to have capacity for up to 120,000 tons of mixed MSW per year with the ability to convert about 45% of incoming material into a refuse-derived fuel. The patented HEBioT MBT system is already being used in Europe, and will be licensed for its first North American use at this location. Discussions are underway about additional locations, including in upstate New York, at the Envirowaste property in Philadelphia, and possibly on the West Coast.
The initial facility is expected to begin commissioning this month and ramp up operations in the first quarter of 2019. Prior to this deal, BioHiTech recently acquired an additional stake in that project to become majority owner over Entsorga itself.
According to Schmidt, a growing number of Gold Medal's customers are looking for landfill alternatives to help meet sustainability targets. He anticipates the Entsorga West Virginia technology will be cost-competitive with other regional landfill or WTE options, and will primarily rely on tip fees for revenue. Another possible side benefit is that, amid a tight time for recycling markets, the MBT process is well-positioned to handle food-contaminated material unwanted in a MRF.
Such technology may be prevalent in Europe, but aside from the ongoing Fiberight project in Maine and a few other concepts, it has yet to take hold in the U.S. While multiple executives in the landfill or WTE business have told Waste Dive in recent months they don't believe it will happen any time soon, Gold Medal has a different view.
“They kind of have to promote a landfill. That’s where their debt is serviced, that’s where their cash flow is generated," said Schmidt, adding that shareholder expectations are always a driving factor. “We just think we’ve got a more environmentally sustainable solution."
Schmidt recognized that while solutions may not supplant the business model of any major names in the near future, it could potentially some day. In the meantime, Gold Medal is looking for more acquisitions in its market and more people that believe in its mission.
https://www.wastedive.com/news/gold-medal-vertical-integration-apple-valley-deal/543882
• Gold Medal Group's recent acquisition of Apple Valley Waste (AVW), with the backing of owners Kinderhook Industries and BioHiTech Global, has created a growing force in the Mid-Atlantic region. AVW comes with an additional stake in the Entsorga West Virginia mechanical biological treatment facility, which is currently under construction.
• AVW also comes with 130 trucks and a recently constructed Maryland MRF. Gold Medal will now have operations in Pennsylvania, New Jersey, Maryland, Virginia and West Virginia — and major new market entries, including Baltimore and Washington, D.C.
• The former CEO and COO of AVW will be leaving, but the vast majority of employees are expected to stay on due to minimal market overlap. "[T]hey’re really going to help us achieve that long-term goal of being the first 'zero waste' to landfill environmental business the industry," Michael Schmidt, EVP of strategic growth and development at Gold Medal, told Waste Dive in an interview.
Dive Insight:
Gold Medal Group was created earlier this year after private equity firm Kinderhook Industries and BioHiTech Global partnered to purchase the New Jersey company Gold Medal Services. Their stated goal at the time was to change it into "a technology-driven sustainable waste services provider." In August, the new Gold Medal acquired two companies that owned the Envirowaste facility in Philadelphia. That LEED-certified site can process both C&D and MSW material for recycling.
While Gold Medal has already been focusing on diversion alternatives through multiple MRFs and on-site digester offerings, this latest Apple Valley deal is expected to take it to a whole new level by further expanding ownership in the Entsorga project.
"It’s not just a traditional roll-up of a waste company," said Schmidt of the AVW deal. “It’s a roll-up of a waste company that’s going to help change the paradigm of the industry."
As planned, the Entsorga facility is expected to have capacity for up to 120,000 tons of mixed MSW per year with the ability to convert about 45% of incoming material into a refuse-derived fuel. The patented HEBioT MBT system is already being used in Europe, and will be licensed for its first North American use at this location. Discussions are underway about additional locations, including in upstate New York, at the Envirowaste property in Philadelphia, and possibly on the West Coast.
The initial facility is expected to begin commissioning this month and ramp up operations in the first quarter of 2019. Prior to this deal, BioHiTech recently acquired an additional stake in that project to become majority owner over Entsorga itself.
According to Schmidt, a growing number of Gold Medal's customers are looking for landfill alternatives to help meet sustainability targets. He anticipates the Entsorga West Virginia technology will be cost-competitive with other regional landfill or WTE options, and will primarily rely on tip fees for revenue. Another possible side benefit is that, amid a tight time for recycling markets, the MBT process is well-positioned to handle food-contaminated material unwanted in a MRF.
Such technology may be prevalent in Europe, but aside from the ongoing Fiberight project in Maine and a few other concepts, it has yet to take hold in the U.S. While multiple executives in the landfill or WTE business have told Waste Dive in recent months they don't believe it will happen any time soon, Gold Medal has a different view.
“They kind of have to promote a landfill. That’s where their debt is serviced, that’s where their cash flow is generated," said Schmidt, adding that shareholder expectations are always a driving factor. “We just think we’ve got a more environmentally sustainable solution."
Schmidt recognized that while solutions may not supplant the business model of any major names in the near future, it could potentially some day. In the meantime, Gold Medal is looking for more acquisitions in its market and more people that believe in its mission.
https://www.wastedive.com/news/gold-medal-vertical-integration-apple-valley-deal/543882
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