AWARD SPOTLIGHT: Clairvest Winner of 2021 PE Global Dealmaker Award for County Waste of Virginia

It was after a successful exit together at a previous U.S. waste management company that Clairvest Group Inc. was invited to invest in County Waste of Virginia by its founder Scott Earl and his long-time advisor and shareholder partner Jerry Cifor.
It was 2013, two years after Toronto-based Clairvest wrapped its investment in the duo’s previous company, Hudson Valley Waste Inc., generating a 2.0x multiple of capital and an IRR of 88%.
“We sold that business, which furthered our relationship with Scott and Jerry and naturally led to the investment County Waste,” says Michael Castellarin, a managing director at Clairvest. “Very rarely in private equity do you get the privilege to partner with the same two management partners, as we did at County Waste.”
Clifton Park, New York-based County Waste had many similarities to the pair’s previous company, including focusing on residential waste and recycling collection and implementing automated collection trucks and other technologies to differentiate the business. But County Waste was a lot more acquisitive, making 65 tuck-in acquisitions in under seven years.
The major difference was geography: While Hudson Valley Waste focused on the greater Capital New York region, County Waste targeted the Central Virginia market and the Pocono Mountain regions of Pennsylvania. In many areas where County Waste rolled out residential collection services, the company was the first to offer automated collection services coupled with single-stream recycling to residents.
Clairvest managing director Adrian Pasricha says his firm looks for aligned interest when making an investment, including owners who are directly involved in running the company, which was the case at County Waste.
“These aren’t professional managers. These are owners who we work with, and they’re looking to both grow and protect their own capital. That gives you a lot of confidence,” Pasricha says.
Cifor, who has a history of executive roles in public and private waste management companies, says he and Earl didn’t consider another private equity firm for County Waste, given their past experience with Clairvest.
“They were as involved as we needed them to be, or as uninvolved as we wanted them to be, which meant they were the right partner for our type of management team,” Cifor says.
Following the initial investment in 2013, Clairvest made two more equity investments in County Waste and provided subordinated debt to help the company invest in new technology and scale through acquisitions.
“They were instrumental in our ability to grow the business over the seven-year period that they were in it,” says Cifor, providing capital as well as resources, analysis and informed insights.
During Clairvest’s investment period, County Waste grew its base from about 100,000 to 336,100 residential customers. Alongside the 65 acquisitions, revenue increased by more than 400% and EBITDA grew by more than 600% as County Waste expanded its market share. The company also successfully permitted and constructed a new transfer station and renovated a material recycling facility in Virginia. County Waste maintained its residential recycling service even after recycling markets were battered when China severely restricted the importation of many recycled commodities starting in early 2018.
County Waste invested heavily in technology, including automated curbside collection that enables employees to manage the curbside pickup of waste and recyclables from inside the truck, allowing for a more sustainable workforce.
“That was very helpful given the challenges the industry has in attracting and retaining labour,” Cifor says.
He says Clairvest was the ideal partner as the company expanded, including through more challenging times.
“Everyone’s a good partner when things are going well,” Cifor says, “but you get to know who’s really a good partner when things aren’t going so well. I’ve seen Clairvest behave during good times and bad times, and they’ve always been more than fair. Even when they could have taken advantage of situations, they never have; they’ve always been fair. I think that’s why we went back to them [with County Waste]. It’s all about picking the right partner.”
On Jan. 1, 2020, Clairvest sold its stake in County Waste to GFL Environmental Inc., earning an IRR of 30% (32% IRR including escrow received in January 2021) and a 3.6x multiple on invested capital on its US$48M investment (before considering a deferred contingent payment that is based on achieving certain corporate milestones. The contingent payment, if earned, would bring the aggregate return on Clairvest’s investment to 4.6x).
Cifor says the company wasn’t actively seeking to sell the company but was approached by GFL with an attractive offer.
“It was the right price and the right partner at that point in time for us,” Cifor says.
Castellarin described the exit valuation as “very fair, compared to what’s going on in the market and other transactions.”
He says County Waste grew to become “an undeniable leader” in the Virginia and Pennsylvania markets and called it a “privilege” to be an investor, partner and work with Earl and Cifor on their latest venture.