The Ledger
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Private equity outperforms public markets because firms sprint in relays
“It's one of the reasons I believe private equity has been able to deliver consistent outperformance relative to the Broader equity markets for 30 years, because under private equity ownership, we sprint.”
Waste services operate like utilities without regulatory return caps
“So when you think about a stable business model, waste really fits the bill, and it's in some measure like a utility, yet there's not a rate cap on the returns.”
Michalik: Industrial waste tank demand grew steadily over 20 years with only one bust
“What we did to get comfortable that was really a one-time phenomenon is we looked at 20 years of industrial waste tank demand, and over that twenty-year cycle, you really had one bust, and you could see the bust coming by the overinvestment in the Proceeding t…”
Kinderhook secured the Adler Tank add-on before closing Mobile Mini
“We had in our back pocket the opportunity to acquire the Adler Tank business, which was their largest competitor. We knew that at the point at which we finally agreed to terms, and that made us pretty pleased with the outcome that we were able to drive.”
Controlling waste volume drives more value than owning trucks or landfills
“The most important asset in the waste industry is waste, and you have to control the waste To drive value through your operation.”
Michalik: Waste services preserved margins during inflation via price increases
“In the last 24, 36 months as we've entered into what has been a very Rapid inflationary environment. Waste services have been able to maintain margin by passing price to their customers.”
Kinderhook initiated the Ironclad acquisition by cold-calling WillScot's CFO
“One of our operating partners was previously involved with the company, had a inkling that the public parent, Will Scott, was interested in divesting their mobile mini tank and pump division. We reached out to the CFO at the time, expressed our interest in the…”
Michalik: Mobile Mini Tank targeted only 2% price increases amid 9% inflation
“They've been targeting two percent price increases and what at that point was starting to become a nine percent inflationary environment.”
Michalik: Frack tank and dewatering box replacement costs jumped 20% to 30%
“The cost of replacing the equipment was up double digits. We're talking 20 and 30% increases in the price to build a new frack tank or a new dewatering box.”
Kinderhook acquired Mobile Mini Tank for less than 7x EBITDA
“We bought the business for less than seven times EBITDA.”
Mobile Mini and Adler combination created largest North American waste tank player
“So I think we closed on the mobile mini tanks October first of 22. February first of 23, we closed on the Adler add-on acquisition. That made us the largest player by assets in the industrial waste tank business in North America.”
Michalik: Ironclad raised fleet utilization to 67-68% from 50% and mid-60s
“The mobile mini division was running in the mid-sixties of utilization. We bought it. The Adler division was running just about 50% utilization. Today we're at combined 67, 68%.”
Ironclad was financed under 4x debt-to-EBITDA with nearly 50% equity
“Our partners at Twinbrook helped us finance this deal. We've financed it inside of four turns of debt to EBITDA. We have a very flexible balance sheet. We are well capitalized at almost 50% equity capitalization across the combined platform”
Michalik: Ironclad achieves double-digit top-line growth and 40% EBITDA margin
“So we've been driving double digit top line growth every month, month over month since our ownership. We're at 40% combined EBITDA on the business today.”
Ironclad Environmental Services generates over $100M in combined EBITDA
“We have north of a hundred million dollars of EBITDA already on the combined platform.”