Revving up Reconomy
Last week the waste management and recycling business I chair, Reconomy, made its first acquisition since I joined in 2009. Back then I was CEO and the business was in, let’s say, a challenging situation. It had expanded too rapidly, making a dozen acquisitions just before the financial crash arrived in 2008. Losing money, it needed a rapid turnaround to survive. As part of the turnaround, we set about selling the majority of the business to Viridor, a well-run and much larger company in the same sector.
In the summer of 2010 we succeeded, relieving our debt burden and leaving a much more focused business. The company was much smaller now, of course, and didn’t need a corporate head office any more. Fortunately, the owners (private equity house Bregal Capital) asked me to stay on as Chairman. The slimmed-down Reconomy has been remarkably successful since, nearly doubling in size and becoming the biggest – and best – player in its sector.
The pre-2009 experience has made us all much more cautious about acquisitions, so it was with some caution that we approached the idea of inorganic growth on top of the organic growth we’re achieving. The company we’ve acquired, Countrywide Waste Management, which incorporates MT Waste Management, is a great business with a terrific team. Its products are complementary to Reconomy’s. We’re looking forward to bringing the businesses together to offer a wider slate of services to a broader range of customers. The key, of course, is to integrate intelligently, realising the economies of scale where it makes sense without losing the positive attributes each business brings. And as of last week, that’s just what we’re working on together. The hard works starts here!
Reconomy announces acquisition
© Patrick Macdonald 2015