One Person’s Trash is Another Person’s Treasure

A recent Heartwood Partners investment in a waste services and recycling business was fifteen years in the making, starting when we looked at investing in a bakery food recycling business.  The business turned bakery waste (i.e., a bad batch of cereal or muffins) into animal feed (primarily for pigs). The unique odor of that facility made an impression on us but not nearly as much as the energetic business founder did telling us (with a big smile on his face) that the smell wasn’t spoiled muffins or cereal but the “smell of money.”  

We missed out on that opportunity (which was quietly acquired by a strategic buyer), but we were hooked on the recycling space.  The notion of keeping waste out of landfills resonated with us, as well as the opportunity to “do well by doing good”.

Coming out of that opportunity, we began to sketch out and evaluate a number of different recycling and environmental services businesses. We were delighted to discover that there were many types of waste materials being recycled, de-characterized and / or re-used. In some cases, the economics were exceedingly robust and in other cases, the math did not support strong returns.  We took a hard look at businesses with strong economic moats and processing capabilities and in other cases, purely commoditized materials subject to wild pricing/profitability swings.

Fast forward to today, we have visited over 100+ recycling/waste processing facilities to date – glass, Material Recycling Facility facilities, soil, dredge, medical waste, batteries, drill cuttings, aerosol cans, light bulbs, wastewater, scrap, biosolids, universal waste and the list goes on and continues to grow, which is the best part of the category.  This research led us to not only waste processors but also to consumer-based businesses that were keen on reducing landfill waste (specifically reducing the use of plastic water bottles).

Our interest not only extends to new platform companies but looking at increasing the ways our existing family of companies recycle materials in house and ultimately the recyclability of our finished products after they have been used by their end-customers.  For example, Universal Woods (, makes an aluminum sublimated material used in graphics and flooring solutions.  Scrap from manufacturing the finished product can be thrown into a recycling bin along with soda cans to be 100% recycled (as also can be post-consumer product).

There are ample opportunities across packaging, agriculture, consumer, and services to pursue some of these macro themes.  Given the success of some of the companies we have partnered with in the past, it should come as no surprise that Heartwood Partners has been hard at work identifying and pursuing recycling and environmental services companies with strong tailwinds and good macros.  We closed on a new investment in a high-growth specialty waste/recycling sector that we anticipate announcing in 2022. The founders/management team of this company were not actively looking for outside growth capital when we initially approached them, and they had said “no” to a number of other private equity firms and investment banks over the years. What set Heartwood Partners apart? Our investment team’s deep experience in the environmental services / recycling sector, our singular focus and partnership approach to working with family / founder owned businesses and importantly our current cash-yield / low leverage strategy that struck them as a unique in a crowded market. The core elements of our shared vision include investing in people / “new seats” to scale, formal strategic planning, growth capex to add more processing capacity at their Resource Conservation and Recovery Act permitted facility and a robust add-on strategy, which is already well on its way, please find our criteria below. 

Heartwood Partners is focused on partnering with family and management-owners. Our approach combines strategic execution with conservative capital structures to support long-term growth, including organic and acquisition-driven expansion into new products, services, and end markets.  Please visit the Heartwood Partners website at to review our approach and investment portfolio.  

Environmental Services Portfolio Company Add-On Criteria:

  • Processing and recycling facilities
  • RCRA (Resource Conservation and Recovery Act) permitted facilities
  • Focus on specialty waste processing capabilities across, e.g., medical, wastewater, liquid, hazardous waste streams, among others