The industrial recycling industry is undergoing rapid growth and transformation, shaped by various industry trends and M&A activity. Through our work with Complete Recycling Solutions in its acquisition by TerraCycle, we gained valuable firsthand insights into the deeper dynamics and latest developments in the industrial recycling industry.
Here are some of the key industry drivers:
- Solar panels: In the U.S., only 10% of solar panels are currently recycled, which offers a huge opportunity for service providers to capitalize on implementing more effective end-of-life processes. In an effort to work towards these improvements, regulations promoting reuse have been put in place, while governmental bodies and manufacturers have initiated collaborations to develop a structured recycling system.
- E-waste: It is estimated that over 347 million metric tons of electronic waste (e-waste) exist globally, with a recycling rate lower than 20% (1). To tackle this problem, it is crucial to adopt a circular economy approach through designing products for durability, repairability, and recyclability.
- LED bulbs: As compared to its counterparts, there has been a more proactive approach to planning for the disposal of LED products. Many local recycling centers, waste management facilities, and municipalities have established recycling programs for LED bulbs. Industrial recycling service providers can implement similar programs but will need to make investments in suitable equipment to effectively cater to the continuously expanding demand.
M&A Trends:
- Growth in acquisition spend: Major waste companies have significantly increased their acquisition spend, with an estimated $663 million spent on acquisitions in the first quarter of 2023 alone (2). This trend is expected to continue throughout the duration of the year.
- Private equity involvement: Private equity firms are actively investing in the waste and recycling industry, considering it an attractive investment opportunity that aligns with sustainability goals. These firms are fueling the growth of smaller players in the market and enabling them to compete on a larger scale. Private equity involvement brings increased funding to the sector, as well as opportunities for operational synergies and cost efficiencies.
- Consolidation strategies: Both financial and strategic buyers in the industrial recycling industry are implementing consolidation strategies to strengthen their market positions and achieve economies of scale. The main strategies at play include geographic expansion, portfolio diversification across complementary services, and vertical integration strategies.
The industrial recycling industry is experiencing significant growth and transformation, driven by various industry trends and M&A activities. Solar panel, e-waste, and light bulb recycling are crucial areas of focus for creating a more sustainable future. By addressing the challenges in these areas and leveraging the opportunities they present, the industry can make substantial progress towards achieving a circular economy. To learn more about the industrial recycling industry and M&A trends read our recent insights piece.
At Harbor View, we remain committed to monitoring and participating in the ongoing developments within the industrial recycling sector, helping selling founders achieve well deserved liquidity and buyers attain company growth through strategic acquisition.
Sources:
- Latest Global E-Waste Statistics and What They Tell Us
- PitchBook
