Sanlam Private Equity to acquire SkipWaste
Sanlam Private Equity (SPE) announced today it had acquired a controlling stake in SkipWaste, a leading provider of integrated waste management solutions to commercial, industrial and retail clients, primarily in Gauteng. As a business that neither owns nor operates landfill sites, SkipWaste is a strong fit for SPE, a firm that is deeply committed to being sustainability-led.
SkipWaste leverages its strong market share in waste logistics to drive and offer innovative and environmentally conscious waste management solutions to its clients, through waste diversion from landfill disposal towards recovery, recycling and alternative disposal.
SPE, a division of Sanlam Investments, made the acquisition through its new private equity fund, SPE Mid-Market Fund I, one of three impact-focused funds in the Sanlam Investors’ Legacy Range launched in 2020 to create and preserve 27,000 jobs while still delivering value for investors. SkipWaste becomes the fourth acquisition in the Fund, following that of Cavalier Group, Absolute Pets and Q Link, announced in May last year.
Gift Pule, Investment Associate at SPE, says the waste management industry in South Africa has seen a lot of private equity activity from local and global players, which is positive for the economy and the environment. “Besides its long track record, strong market share in waste logistics and experienced management, SkipWaste was particularly attractive to us as it neither owns nor operates landfill sites and it has a strategic focus on diverting waste towards alternative and more sustainable forms of waste disposal.”
He said the business is now poised for growth and diversification through the diversion of various organic, food and construction waste from more clients seeking “greener” waste management solutions and increased contribution to the circular economy through recycling and conversion.
SkipWaste has been family-owned and run since its inception in 1984, with CEO, Mrs Susan McDonald, at the helm for almost two decades. It operates out of three strategically-located depots across Gauteng, several transfer stations and a 13-hectare waste treatment facility in Springfield, located south of the Johannesburg central business district.
SkipWaste has an integrated business model, spanning onsite waste management, primary storage, waste logistics, recycling and recovery, as well as alternative disposal and conversion. With more than 1,000 clients and 3,000 sites primarily in Gauteng, SkipWaste is well-positioned to sustain its access to waste-at-source and the company’s ability to redirect more waste towards alternative forms of disposal.
McDonald says, “SkipWaste is excited to partner with our first institutional investor, with a sustainable waste management strategy, capital for growth and commercial expertise to unlock the company’s full potential. Having been a part of this business for most of my life, it was important for us to select the right partner to help us realise our next growth phase.”
It is estimated that South Africa generates approximately 108 million tonnes of total waste annually, 90% of which still goes to landfills. Paul Moeketsi, Managing Partner at SPE, says, “Given our credentials as a black fund manager in terms of the BEE Codes of Good Practice, SkipWaste is set to become the largest majority black-owned integrated waste management solutions provider and a preferred waste partner for clients looking for greener waste solutions.”
“Our plan is to conclude between 8 and 12 investments in this fund. SkipWaste is our fourth investment in the fund and the acquisition significantly advances our investment programme in this fund, which is set to achieve final close by 31 March 2023. We were attracted to SkipWaste by its uniqueness in the waste management sector and we are excited to partner with the management team of the business. Coupled with the need for sustainable waste management practices and recent legislative changes to reduce landfill disposal, we are looking forward to supporting its waste diversion and diversification strategy in its next growth phase.
“SkipWaste is labour-intensive and we expect that it will continue to grow its current staff complement of 454 employees – this aligns strongly with our impact objectives around job preservation and growth. Overall, youth accounts for over 75% of the staff, of which the majority is black and from historically disadvantaged backgrounds,” Moeketsi concluded.
SkipWaste was exclusively advised by Novitas Capital Advisors. “SkipWaste attracted considerable interest from international and local suitors. McDonald and the management team selected SPE based on its strong cultural fit, shared values of responsibility for SkipWaste’s employees and a sense of environmental stewardship,” said Dana Gordon-Davis, Director of Novitas Capital Advisors.