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Mergers & Acquisitionsin the e-Waste Industry
Presented by:
Mark RobardsVP Sales & Marketing
ECS Refining
Table of Contents
• Introduction• ECS Refining & M & A Growth• The Industry & Opportunity• Strategies• Planning - Focus• Lessons Learned
ECS Refining - Overview• Founded in 1980• Current Year Revenue & Profits
– 2009 Revenue (estimate) - $73.4M – 2009 Profit (estimate) - - $ 9.2M
• Employees – 160 FTE, 70 Contract• 9 Processing facilities – CA, TX, OR, OH• Basel Action Network – e-Steward Founder• Major Customer Segments
– Generators/OEMs– Collectors/Handlers/Recyclers – Large/Midsize Enterprise
ECS Revenue Historyin $000’s
ECS Business Units
Refining Operations
ECSAircraft
Tin – LeadSmelter
ElectronicsRecycling
Hydro ProcessHigh Temp AlloysPrecious Metal Rec.
Pyrometallugy Proc.Tin/Lead SmeltingSolder & residues
Electro-Mechanicale-Waste shredding,sort, separate intocommodity products
Photo Services Operations
ECS RefiningPureflow™
Photo Solution ProcessingSilver recovery & service solution
Battery/Power Devices
CanadusPower Systems
Battery revitalization productAdvanced Desulfation Technology
Resale OperationsWholesale/Retail/e-Commerce
Mfg. Equip.Proc. Control Equip.Test Equip.
PC’s, LaptopsDisk DrivesServers
OutbackEquipment
UnitedDatatech
SurplusComputers
Surplus IT EquipServers, Gadgets Peripherals
ECS Sales/Support & Processing locations
ECS Sales/Support Sites
ECS Refining N. America
Acquisition History
220,000 70,000 25,00075,000Units Disposed of Daily in the US alone
2,200,000 tons of E-Waste Every Year just from B2C sources
??? tons from B2B sources
The Industry Opportunity
E-Recycling M & A Intro
• No company > 7% market share
• Fastest growing segment of municipal “solid waste” material stream
• Industry Drivers:– Legislative funding sources– “Social & Environmental responsibility”– Producer funding sources– Commodity prices stabilizing
• Increased cost (barrier) to entry
E-Recycling M & A Intro
• Extremely fragmented industry
• Many undercapitalized firms
• No truly integrated National or Global firms
• Regional firms control customers/material
• Large customers “begging” for a solution– Reduce number of vendors/partners worldwide– “Producer Responsibility” state legislation
E-Recycling M & A Intro
• Last 24 months - Increased activity in M&A– Slowed/stopped Q4 2008– “Bottom feeding” & consolidation in 2009-10
• Intn’l firms into US – Rob Brown, Lincoln Intn’l– Sims – Global Investment Recovery – 10/08
– EnviroHub/Cimelia – MaSer – 6/09
– Centillion – C&E Recycling – 8/08, Metech – 10/07
• Failed/Idled M & A strategies – Intechra
M & A Strategies
• “Bottom Feeding” for troubled firms with valuable assets– Acquire customer base– Key employees – ie: Sales Reps– Specific Assets – facilities, equipment/processes– Specific Services/Markets - resale, asset mgmt
• “Tuck in” or “Adder” acquisition– Easy, incremental fit into existing company
• Extends current services or technologies• Often is an existing customer or supplier
M & A Strategies
• Strategic Acquisition or Merger– Used to expand quickly or strategically
• Additional Regional coverage• International – Localized services/Market expertise• Additional services/markets• Processing or technology acquisition
– Commonly used valuations and multiples– Investment bankers in the process– Equity deals or large cash infusions– “Roll up” strategies
M & A Strategies
• Opportunistic acquisitions– Good companies low on cash– Founders retirement or exit plan– Customer driven expansion requirement
• Additional locations• Additional services or processes
– Company wants to be part of someone larger– Company needs new equipment or processing
• Trading equity for technology or process “know how”
M & A Planning
• Develop a specific plan
• Develop “War Chest”/Funding sources– Cheaper now rather than later
• Identify targets and evaluate for:– Contribution – profit, services, location, people– Synergies – potential for expense reduction– Cultural “fit”
• Identify and compare core corporate goals and objectives
• Focus, focus, focus
Transaction methodology
• “Asset Sale” – Leave the trouble behind
• Work outs, Non-Compete Agreements
• Comprehensive, professional “due diligence”– Financials and Bank statements– Customer base (80-20 rule)– Operations processing and inventory– Executive backgrounds and experience– Downstream customers & markets
• Strong competent Legal counsel and Bankers
M & A Lessons learned
• Acquire or hire successful “leaders” to guide/blend people and cultures
• Allow autonomy for acquired firm but hold “purse strings” firmly
• Trust, but review/investigate early and often to start
• If you’re not sure of the “fit”, don’t do the deal
• An “Opportunistic” deal can be very, very expensive and distracting if not a perfect fit
Questions??
Contact information:
Mark Robards
VP Sales & Marketing
ECS Refining
+1 408 200 7052
The ECS Pledge
Thank you foryour time,
ECS Refining
