Newly-Formed Company Positions WM to Rapidly
Accelerate Film and Plastic Wrap Recycling
HOUSTON, Sept. 13,
2022 /PRNewswire/ -- WM (NYSE:WM) today announced
that it has agreed to acquire a controlling interest in Avangard
Innovative's U.S. business, which will operate as Natura PCR –
an independent company expected to scale and grow recycling
capacity to produce an estimated 400 million pounds per year of
post-consumer resin (PCR) in five years. Through Natura PCR, WM
expects to deliver new recycling capabilities for its customers and
provide circular solutions for films and clear plastic wrap used
commercially, such as plastic stretch wrap for pallets, furniture
film, grocery bags and potentially shrink wrap around food and
beverage containers.
"WM's controlling interest in Natura PCR positions us to grow
and scale rapidly in the emerging PCR space," said Jim Fish, president and CEO, WM. "WM's core
material supply capabilities, with the head start and knowledge
provided by Avangard's U.S. business, will help Natura PCR quickly
deliver circular options to WM's customers as an important
component of our continued growth strategy in recycling. Today,
there is so much untapped potential to reuse film – which impacts
many of our commercial customers. We can help our customers close
the loop and bring more recycled materials to the store shelf."
Leading materials science company, Dow, has been working with WM
to help increase the recycling rate of plastics and create
sustainable solutions in packaging, infrastructure and consumer
applications. Dow has also been working with Avangard Innovative
since early 2020, purchasing the company's PCR pellets to produce
REVOLOOP™, Dow's product line with PCR content.
"We have been working with both companies to increase the use of
recycled plastic in Dow's products, and Natura PCR brings together
capabilities that will unlock more options for hard-to-recycle
plastics for the industry," said Nestor de
Mattos, North America
commercial vice president, Packaging & Specialty Plastics, Dow.
"Natura PCR further expands at scale, waste-to-market solutions
across North America and advances
our goal to help divert plastics from landfills to circular
solutions."
Natura PCR will focus on the mechanical recycling of film and
flexible plastics – some of the most complex plastics in the
recycling stream today – and converts these materials to PCR that
can be used to manufacture new products replacing virgin materials.
These streams make up almost a quarter of today's plastic
generation, but only about 5 percent is recycled today.
Demand for PCR is expected to grow in response to
consumer-packaged goods companies' commitments to use recycled
content and pressures from consumers and regulators to increase the
PCR content in the packaging materials the companies manufacture.
WM has demonstrated a track record of collecting materials from
commercial streams for the feedstock needed to produce PCR content
and expects its materials sourcing expertise will enable the
increased volume of PCR pellets that Natura PCR can produce for use
in new products.
"This transaction helps the business quickly scale
operations, maximize source feedstock and meet the continued rise
in demand for environmental additives, such as recycled plastic
resin," said Rick Perez, CEO,
Avangard Innovative. "After 30 years in the recycling business,
WM's significant involvement, coupled with the strong relationship
with Dow and other customers, will set Natura PCR up to offer the
most innovative end-to-end circular economy solution in the
market."
Natura PCR plans to grow recycling capabilities at Avangard's
existing plant in Waller, Texas,
and build new plant capacity in the Midwest. Natura PCR will be
primarily owned and controlled by WM. Avangard and affiliated
entities will hold a collective minority equity position in Natura
PCR. WM expects to receive investment returns comparable to its
previously announced automation investments in single-stream
recycling. The transaction is expected to close in late 2022,
subject to the satisfaction of customary closing conditions,
including regulatory approvals.
ADVISORS
Goldman Sachs & Co LLC is serving as the
exclusive financial advisor and Locke Lord LLP is serving as the
legal advisor to WM on this transaction. Seale &
Associates, Inc. is serving as the exclusive financial advisor and
Vinson & Elkins LLP is serving as the legal advisor to Avangard
Innovative on this transaction.
ABOUT WM
WM (WM.com) is North America's largest comprehensive waste
management environmental solutions provider. Previously known as
Waste Management and based in Houston,
Texas, WM is driven by commitments to put people first and
achieve success with integrity. The company, through its
subsidiaries, provides collection, recycling and disposal services
to millions of residential, commercial, industrial and municipal
customers throughout the U.S. and Canada. With innovative infrastructure and
capabilities in recycling, organics and renewable energy, WM
provides environmental solutions to and collaborates with its
customers in helping them achieve their sustainability goals. WM
has the largest disposal network and collection fleet in
North America, is the largest
recycler of post-consumer materials and is the leader in beneficial
reuse of landfill gas, with a growing network of renewable natural
gas plants and the most gas-to-electricity plants in North America. WM's fleet includes nearly
11,000 natural gas trucks – the largest heavy-duty natural gas
truck fleet of its kind in North
America – where more than half are fueled by renewable
natural gas. To learn more about WM and the company's
sustainability progress and solutions,
visit Sustainability.WM.com.
ABOUT AVANGARD INNOVATIVE
Avangard Innovative is a
leader in technology-driven circular economy solutions. With 30
years of experience, Avangard Innovative offers full-service waste
management and recycling optimization solutions at all levels of
the process. AI's proprietary technology, program management &
optimization, and post-consumer resin manufacturing are designed to
help clients measure, manage and monetize their sustainability
programs. Avangard Innovative's mission is to preserve and protect
the environment by achieving zero-waste-to-landfill. For more
information, please visit avaicg.com.
FORWARD-LOOKING STATEMENTS
WM, from time to time,
provides estimates, comments on expectations relating to future
periods and makes statements of opinion, view or belief about
current and future events. This press release contains a number of
forward-looking statements, including all statements regarding
closing of the transaction; anticipated results of the transaction
and business performance; future growth and production of the
acquired business; future investment returns; future plastic
generation and demand; and location and construction of future
plants. You should view these statements with caution. They are
based on facts and circumstances as of the date the statements are
made and are subject to risks and uncertainties that could cause
actual results to be materially different, including but not
limited to, general economic and market conditions; inability to
obtain regulatory or government approvals or to obtain such
approvals on satisfactory conditions; inability to satisfy other
closing conditions; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
transaction agreement; legal proceedings; unexpected costs, charges
or expenses; failure to successfully integrate the transaction and
obtain the results anticipated; and other risks and uncertainties
described in Part I, Item 1A of WM's most recently filed Annual
Report on Form 10-K, available at investors.wm.com. WM assumes no
obligation to update any forward-looking statement, whether as a
result of future events, circumstances or developments or
otherwise.
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SOURCE Waste Management National Services, Inc