Prophet Equity’s Apex Environmental Resources Holdings II LLC Completed Five Add-On Acquisitions and Several High Value Strategic Initiatives, Increasing Daily Volumes 200%+ and Revenue 6X Since Acquisition
January 22, 2020 – Southlake, TX – Prophet Equity (“Prophet”), a Southlake, TX-based private equity firm, has completed the transformative merger of its portfolio company, Apex Environmental Resources Holdings II LLC (“Apex” or the “Company”), with The Action Environmental Group, Inc. (“Action”), majority owned by Summer Street Capital Partners, LLC. The merged Apex-Action company will conduct operations under the Interstate Waste Services (“IWS”) brand. Littlejohn & Co., LLC, a private investment firm based in Greenwich, CT led the equity financing to facilitate the transaction, while GSO Capital Partners, the credit investment arm of Blackstone, led the debt financing.
Prophet completed the initial Apex platform investment in October 2015, partnering with waste industry veterans Darren and Anthony Rizzo to purchase the Apex solid waste landfill in eastern Ohio and its local Apex transfer station. Under Prophet’s ownership, Apex successfully acquired and integrated three additional northern New Jersey transfer stations – Bridgewater Resources, Inc., Doremus Ave Recycling and Transfer, L.L.C., and Sajo Transport, Inc. – one northern New Jersey transload facility which operates a shortline railroad – New Jersey Rail Carrier Limited Liability Corporation, – as well as a western Pennsylvania-based transfer station, McKees Rocks Transfer Station LLC. During the four plus years of its majority ownership, Prophet and Apex management also expanded permitted landfill capacity approximately tenfold (10X), architected, designed and integrated a uniquely connected, point-to-point, proprietary rail transportation network, secured long-term contracts with leading New Jersey municipalities, while also bringing online a renewable landfill gas recovery and processing system producing a royalty-based cash flow stream effectively into perpetuity.
John Tatum, Managing Director at Prophet Equity commented, “We thoroughly enjoyed partnering with the Apex management team over the past four plus years. Apex’s dedicated focus on improving underlying profitability of the company’s waste volumes, coupled with a disciplined approach to acquiring and integrating additional transfer station volumes, allowed volumes and revenue to expand 200%+ and 6X under Prophet’s ownership, while also enhancing underlying profitability. Apex and the IWS transaction demonstrate what is possible when deploying a long-term value creation approach to investments.”
Darren Rizzo, President of Apex, and Anthony Rizzo, Apex COO, commented, “The Prophet Equity team was critical in supporting Apex’s initial acquisition as well as the organic and acquisition-led growth within the highly attractive northern New Jersey solid waste market. Their partnership has enabled the creation of the vertically integrated solid waste platform at IWS. We could not be more excited about both these accomplishments and our next phase of growth on this platform.”
“Apex is another example of a very successful partnership with industry veterans around a strategically strong platform that deserves the capital and know-how to realize transformative growth. From the initial recapitalization, to the tremendous buy & build based value creation success story, our unique hands on approach and the deployment of our Holistic Value Creation™ process is a testament to the value opportunity that can be unlocked in these situations,” added Ross Gatlin, Prophet’s CEO and Managing Partner. “We are excited about our partnership in IWS as significant investors and serving on its Board of Directors as it capitalizes on its position as one of the largest integrated solid waste companies in the largest waste market in the United States. We also thank the exceptionally experienced and talented management team at Apex for their commitment and dedication to maximizing value to date and going forward with IWS.”
Will Sirignano, a Managing Director at Blackstone commented, “We believe the formation of the new IWS is the right outcome for Apex, Action and their respective shareholders. We look forward to partnering with IWS and supporting the company’s long-term success by providing access to business cross-selling opportunities and cost savings through the GSO Advantage Program.”
Stifel, Nicolaus & Company, Incorporated acted as sole placement agent in connection with the equity and debt financing to support the transaction, and Jackson Walker LLP acted as legal counsel to Apex and Prophet Equity.
ABOUT PROPHET EQUITY
Prophet Equity is a private equity firm that uses proven, data-driven analytical techniques coupled with over 100 years of investment and management experience to invest in, unlock and realize future value today. Partnering with owners and management teams, Prophet Equity’s team utilizes a toolkit that is Fortune 500 tested and private equity proven to diagnose and drive dramatic value creation. Portfolio company management teams are highly motivated with clear, uncapped incentives based on realized business performance.
Over the last 20 plus years, Prophet Equity’s Principals have invested in and managed over $2.5 billion of value creation across entities with over $6 billion in revenue. Prophet Equity’s control equity investments focus on strategically strong, lower and middle market businesses with significant value creation potential. These are typically found in partnerships, corporate carve-outs, divestitures and non-strategic business units of larger companies. For more information, please visit www.prophetequity.com or call us at +1.817.898.1500.
ABOUT BLACKSTONE GSO
GSO Capital Partners is the global credit investing platform of Blackstone. GSO is one of the largest alternative managers of the world focused on the leveraged-finance marketplace, seeking to generate attractive risk-adjusted returns by investing in a broad array of strategies.