Case Study

Environmental Waste Company Achieves Acquisition Goals with Stronger Financial Leadership

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Client Situation

A $150 million publicly held environmental waste company adopted a strategy to aggressively expand across the continental U.S. through a well-planned series of acquisitions, mergers, and targeted market roll-ups. Their plan included a forecast to take revenues to $500 million in five years. However, the company lacked a strong management team and suffered from inconsistent operating results, with recent losses of several million dollars. This also contributed to the company’s not having adequate capital to support the growth and acquisition strategy.

Solution

The Board brought in an experienced financial executive, now a NextLevel team member, to serve in several senior positions, including CFO. He soon became an integral member of the management committee whose task was to steer implementation of the strategy. With purview over information systems, the CFO hired a well-qualified VP of IT. He also attracted and hired the company’s first director of human resources to aid the talent acquisition efforts, and the first director of internal audit. The team soon brought in a $50 million equity injection, two new credit facilities of $300 million and $80 million respectively, and a significant expansion of capital and operating leases.

Results

During the financial executive’s three-year tenure, the company’s revenues increased from $150 million to $840 million, exceeding the target under the strategic plan. Net income increased from a loss of $3 million to a profit of $50 million. Expanded earnings per share rose from $(2.70) to $0.58; while the price per share increased from $4.50 to $15.25. During this period, the company evaluated over 125 acquisition opportunities, ultimately acquiring and integrating companies in 118 separate transactions. This included the purchase of one of the company’s largest competitors in a $1.5 billion transaction, the industry’s largest to date.

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