WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019

 
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
WASTE MANAGEMENT,
RECYCLING & REMEDIATION
QUARTERLY UPDATE   Q2 2019
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
INDUSTRY OVERVIEW
WASTE COLLECTION SERVICES IN CANADA
The waste collection services industry in Canada is defined as collecting hazardous and non-hazardous waste and
recyclable materials. Non-hazardous waste includes municipal solid waste and industrial and commercial waste. The
industry includes transfer stations where waste is transferred from local vehicles to long-distance vehicles for transport to
disposal facilities. The industry includes private solid waste management companies that provide curbside collection,
recycling and other waste management solutions to both households and businesses.

•   The waste collection services industry in Canada experienced steady                                         INDUSTRY GLANCE
    expansion during the five years leading up to 2017, growing at an
                                                                                                                      2018 Revenue
    annualized rate of 2.8% to $5.5 billion.
•   Rising consumer spending and consumption levels have resulted in an
    increased residential waste output over the most recent five-year
                                                                                                                    $5.5B
    period.
                                                                                                             Annual Growth 2013–2018

                                                                                                                      2.8%
•   Conversely, according to Statistics Canada non-residential waste
    output experienced a decline between 2012 and 2016, likely a result
    of a continued movement towards waste reduction and efficiency.
•   Key external drivers:                                                                              Projected Annual Growth 2018–2023
    1. Population
    2. Value of non-residential construction                                                                          1.6%
    3. Demand from manufacturing
                                                                                                           Number of Businesses in 2018

                                                                                                                    1,504
    4. Demand from recycling facilities
    5. World price of crude oil
•   The industry has experienced structural change in recent years,
    including:                                                                                            PRODUCTS AND SERVICES
    •   Shift to privatization – Many local governments have had                                           SEGMENTATION (2018)
        difficulty maintaining disposal sites and have sought relief by
        contracting waste collection services to private operators.
        However, the majority of municipalities in Canada continue to be
        served by public waste management agencies.                                                                   15%
    •   Increased regulation – Increased federal and provincial regulation
        has driven up industry costs across all segments. New regulations                                      6%
                                                                                                                                          40%
        are aimed at further development in the diversion of recyclable,
        electronic or compostable waste from landfills.                                                      11%
    •   Transfer stations – In an effort to promote operational efficiency,
        large operators in the industry have focused on developing
        networks of transfer stations and disposal facilitates. These enable                                              28%
        operators to reduce costs.
    •   Vertical integration – In response to increased regulations and
        costs, larger operators have focused on vertically integrating their                         Non-hazardous residential waste collection
        waste management operations. This includes acquisitions to gain
                                                                                                     Non-hazardous non-residential collection
        additional services, as well as acquisitions to gain additional
        landfill facilities.                                                                         Non-hazardous consolidation storage and preparation
                                                                                                     services
                                                                                                     Non-hazardous waste transfer facility services

                                                                                                     All other services

Source: IBISWorld Report 56211CA Waste Collection Services in Canada. Leach, Nathaniel. July 2018.
                                                                                                                                                Page 2
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
INDUSTRY OVERVIEW
WASTE TREATMENT & DISPOSAL SERVICES IN
CANADA

The waste treatment and disposal services industry is defined as owners and operators of waste treatment or disposal
facilitates, including waste combustors, waste-to-energy (WTE) plants, solid waste landfills and compost dumps or other
types of disposal facilitates for hazardous or non-hazardous waste.

•   Overall waste production has continued to grow and industry revenue                                    INDUSTRY GLANCE
    has been increasing despite the trend toward recycling.
                                                                                                                2018 Revenue

                                                                                                              $5.1B
•   Most waste directed to landfills is the product of consumer goods and
    as disposable income levels rise there has a been a higher level of
    consumption.
•   Key external drivers:                                                                                 Annual Growth 2013–2018
    1. Consumer spending
    2. Population                                                                                               1.4%
    3. Industrial capacity utilization
                                                                                                 Projected Annual Growth 2018–2023

                                                                                                                2.2%
    4. Value of non-residential construction
•   The industry has experienced structural change in recent years,
    including:
    •   Waste volume increases – The industry is poised for growth as a                              Number of Businesses in 2018

                                                                                                                 742
        result of continued growth in the economy and higher consumer
        consumption levels with an end result of rising levels of residential
        waste production. The industry will also benefit from a growing
        manufacturing sector. This will lead to a projected 1% annualized
        growth rate in demand from the manufacturing sector. Rising                                 PRODUCTS AND SERVICES
        prices and production in domestic oil and gas will stimulate                                 SEGMENTATION (2018)
        demand from industry services.
    •   Waste-to-energy – Industry operators will continue to turn to
        waste-to-energy operations and gas recovery landfills in an effort                                            4%
                                                                                                                6%
        to combat rising landfill costs and regulations. Operators will                                       4%
        benefit from regulation that supports the use of renewable energy
        as there are tax incentives for renewable energy investment. Over
        the near term, it is expected that operators will shift their focus to                                                          50%
        operating WTE rather than traditional landfill operations.
    •   Diversion from landfills – Over the most recent five-year period,                                 42%
        many provincial governments have introduced waste reduction
        targets to limit waste sent to landfills. Regulations to limit landfill
        waste have led to higher landfill levies, provision of paper and
        organic municipal recycling collection services and stringent
        regulations on waste disposal methods.
                                                                                                   Hazardous waste treatment and disposal

                                                                                                   Solid waste treatment and disposal

                                                                                                   Waste-to-energy

                                                                                                   Non-hazardous waste transfer facility services

                                                                                                   Other

Source: IBISWorld Report 56211CA Waste Treatment & Disposal Services in Canada, Nathaniel. August 2018.
                                                                                                                                         Page 3
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
INDUSTRY OVERVIEW
RECYCLING FACILITIES IN CANADA

The recycling facilities industry in Canada is defined as operators of material-recovery facilities that separate and sort
recyclable materials from non-hazardous waste streams. Operators also sort commingled recyclable materials, such as
paper, plastics, used beverage cans and metals.

•   The industry includes small-scale operators that rely on labour-intensive                           INDUSTRY GLANCE
    processes to large-scale operators that benefit from the use of
                                                                                                             2018 Revenue

                                                                                                     $964.0M
    technological machinery for sorting.
•   The industry has been boosted by efforts by the federal and local
    governments to develop programs that manage waste responsibly.
•   Provincial regulation requires producers of recyclable materials must                            Annual Growth 2013–2018

                                                                                                             0.9%
    contribute to the recycling programs.
•   Industry revenue has slowed in the last five years compared to the
    decade before. This is a result of declining commodity prices that have
    diminished the cost benefit of recycled plastics.                                           Projected Annual Growth 2018 – 2023
•   Key external drivers:
    1. Demand from recyclable material wholesaling                                                           1.0%
    2. Consumer spending
                                                                                                   Number of Businesses in 2018

                                                                                                                282
    3. Population
    4. World price of crude oil
•   The industry has experienced structural change in recent years.
    •   Recycling volume growth – The industry has benefited from                                PRODUCTS AND SERVICES
        increased regulations towards recycling programs. As a result, overall                    SEGMENTATION (2018)
        recycling volume has increased, with the largest segment, household
        recycling, growing at the fastest rate.
    •   Government regulation – The Waste Diversion Act (2002) promotes
                                                                                                              12%
        reducing, reusing and recycling. Subsequently, the Canadian Council
        of Ministers of the Environment approved a nation-wide Action Plan                              8%
        for Extended Producer Responsibility (2009), adding responsibility to
        producers to remain responsible for the recycling of their products.
    •   Demand for recycled materials – The industry has benefited from                              14%
        demand from downstream markets. The decline in the commodity                                                              66%
        markets eroded the financial benefit of purchasing recycled plastic
        goods, however as the world price of oil rebounds and stabilizes,
        demand is expected to pick up.
    •   Technological growth – The industry has experienced strong
        technological growth in the past five years. Advances in automated
                                                                                                  Recyclable material recovery and processing
        processing equipment have led to more streamlined sorting
        processes. This has led to an increase in capital intensity across the                    Sale of waste and recyclable materials
        industry in order to stay competitive.
                                                                                                  Recyclables collection

                                                                                                  Other services

Source: IBISWorld Report 56292CA Recycling Facilities in Canada. Leach, Nathaniel. June 2018.
                                                                                                                                       Page 4
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
INDUSTRY OVERVIEW
CURRENT HIGHLIGHTS
Shipping recycled plastic waste overseas will become a less viable option for the Canadian recycling industry going
forward. China’s decision to cut imports of 24 different types of recyclable products a year ago has led the waste
management industry into a crisis. In addition to China, other Southeast Asian countries, which Canada has relied upon to
import its recycling products, have decided to tighten the regulations around what types of recycled waste they import.
Recently, the Philippines has demanded that Canada take back mislabelled containers that it had sent to the country five
years ago. These containers were supposed to be filled with plastic, however Filipino authorities discovered they
contained mixed waste including household garbage and adult diapers. A waste facility in Burnaby, B.C. will be retrieving
these containers which amount to approximately 1,500 tons of waste. It will cost the federal government approximately
$250 per ton ($375k) to burn this waste in the B.C. facility’s incinerator.

It appears many Southeast Asian countries are no longer going to tolerate Canada’s contaminated recycled waste, as it is
not worthwhile to sort through mixed waste containers to retrieve valuable recyclables. In 2016, Canada exported
approximately 36% of recyclables. Last year, this number dropped to 29% and is expected to continue to decline. Going
forward, Canadian waste companies will have to improvise sorting at waste transfer stations to ensure they are not
contaminating recycle exports, as this will continue to deteriorate the trade relationship. Lastly, governments may need
to take a bottom-up approach to this issue by informing citizens about what is acceptable to recycle and what is not.
Many Canadians may not know that items such as a pizza box with significant grease is not recyclable, or that consumers
must clean and rinse food containers. Overall, education is paramount to improving the recycling supply chain.

With the economics working against recycling, it needs to be supported by policy. The federal government may need to
step in and establish more strict policies with regards to plastic use, collection and disposal. Some industry experts
suggest that an extended producer responsibility model (EPR) is the appropriate next step for Canada to tackle its
problematic recycling system. The EPR model holds large corporations responsible for the packaging they produce, which
accounts for almost a third of the Canadian plastics market.

The right framework in place could position Canada to transition smoothly into a circular economy, where materials are
produced to be consistently reused, and where corporations are responsible for their own recycling fees. In Ontario, a
special adviser on plastic waste and recycling has been named to determine how the province can fully transfer recycling
costs from municipalities to companies. While some analysts predict the cost of recycling and more expensive packaging
will eventually trickle down to consumers grocery bills, companies like Loblaw Companies Ltd. and IKEA Canada have
expressed support for the initiative and say it will not affect their prices. BC adopted the EPR program in 1994 retailers
have been embedding recycling costs into product pricing. Consumers have continued spending more for the brands they
love.

An example of an EPR model currently being piloted is from Loblaws Companies Limited, Canada's food and pharmacy
leader. They recently partnered with Loop, an innovative packaging provider, to offer consumers alternatives to
disposable materials. For Loblaws, this means consumers ordering President's Choice products online in Loop's durable
shopping tote and containers and then having the containers retrieved from their door step at their preferred time. These
sustainable operational models are popping up across the country as the awareness around plastic waste increases.

If the government were to create and manage funding, grants and incentive programs to encourage the adoption of the
EPR model, companies could dedicate capital to the creation of innovative packaging that would support a circular
economy. This would ensure that companies could give their loyal consumers the option to choose their favourite brand,
be environmentally conscious and not sacrifice the extra expense. With many brands wanting to put their best foot
forward when it comes to corporate social responsibility and sustainability, a system where companies produce less
waste seems within arm’s reach.

Sources: S&P Capital IQ, Globe and Mail and Company websites.
                                                                                                                  Page 5
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
INDUSTRY OVERVIEW
CURRENT HIGHLIGHTS
 How much of a premium would you be willing to pay for environmentally sustainable products?
 Plastics which were revolutionary in the mid-1900s, are now becoming a burden to our environment. This is especially
 true for plastics that are used for a short period of time before being disposed. Single-use plastics are becoming a popular
 discussion point with environmental activists and government policy makers, as Canada continues to struggle to increase
 the efficiency of its recycling system. A consumer may use a plastic fork and knife at lunch for approximately 20 minutes,
 then dispose these items into the garbage, where they will remain for the next 400 years. The federal government has
 set out a mandate to eliminate single-use plastics by 2021 – an ambitious goal considering the alternatives are currently
 economically onerous.

 The science behind bioplastics, which are essentially compostable plastics, is quite advanced. However, the trouble lies in
 the cost it will bear on consumers and businesses to fully replace traditional plastics. Compostable items cost anywhere
 from 50 to 200% more than traditional equivalents. In addition to the cost of bioplastics, properly disposing these plant-
 based materials is complex and often involves high amounts of heat and water, which many municipal compost facilities
 don’t currently have the capabilities for. Therefore, many bioplastics will sit in landfills just like regular plastics. This
 drawback is often referred to as “greenwashing”, which means customers are spending more to do what they believe is
 beneficial for the environment, however this benefit is not realized, as waste facilities are not currently set up to
 breakdown this bioplastic material. Bioplastics were intended to create many solutions, but instead have created many
 challenges, as they are often hard to decipher from regular plastics. Ideally, a bioplastic product needs to be created that
 does not need additional processing to compost.

 56% of Canadians support a total ban on single-use                             The poll shows that 32% of Canadians said they would
 plastics, while 25% somewhat support a ban, according                          pay 5% more, 22% said they would pay 2% more and
 to Nanos Research. 10% of Canadians somewhat                                   20% said they would be willing to pay 1% more. 26% of
 oppose a total ban, while 8% are opposed and 1% are                            Canadians surveyed said they would not be willing to
 unsure.                                                                        pay more.

        Support for Total Ban on Single-                                                Premium for Environmentally
                  Use Plastics                                                             Sustainable Products

            9%                             Total Support                                                               5 percent
     10%                                                                             26%
                                           Somewhat support                                              32%           2 percent

                                           Somewhat Oppose                                                             1 percent
                              56%
  25%                                      Opposed                                                                     0 percent
                                                                                     20%
                                           Legend                                                  22%                 Legend

Note: Nanos Research randomly surveyed 1,000 Canadians, 18 years or older; participants were recruited by live agents
by phone, both landline and cell, and a survey was administered online. The margin of error for the random survey is
3.1%, 19 times out of 20. The survey was commissioned by The Globe and Mail.

Sources: S&P Capital IQ, Globe and Mail, Nanos Research and Company websites.
                                                                                                                             Page 6
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
INDUSTRY OVERVIEW
M&A TRANSACTIONS & PERFORMANCE
                                                                    NORTH AMERICAN
                                                    WASTE COLLECTION AND DISPOSAL M&A TRANSACTIONS
                                   20
                                   18      19                            19
                                                                                                                 13
 Number of Reported Transactions

                                   16
                                   14                                              15
                                                               14                                                          14        14
                                   12                                                        13
                                   10                                                                            11
                                   8
                                                     8
                                   6
                                                                                                        6
                                   4
                                   2
                                    -
                                        Q1 - 2017 Q2 - 2017 Q3 - 2017 Q4 - 2017 Q1 - 2018 Q2 - 2018 Q3 - 2018 Q4 - 2018 Q1 - 2019 Q2 - 2019

                                                                        Transaction Volume        Average

                                                              M&A MARKET UPDATE FOR Q2 2019
• The chart above highlights the quarterly merger and acquisition (M&A) market activity within the sanitary services
  industry, including waste management, collection, and recycling operators.
• M&A activity within the industry has been robust in recent years as market participants seek consolidation in a
  fragmented waste management market.
• Since 2014, there have been several large transactions where two large market participants have combined. Examples
  include Waste Connections US, Inc. acquiring Progressive Waste Solutions Ltd. for a reported $2.8 billion which closed
  in June 2016, Waste Connections Inc.’s acquisition of Groot Industries Inc. in January 2017 for a reported $375 million
  and, most recently, GFL Environmental Inc.’s $3.7 billion acquisition of Waste Industries.
• Q2 2019 had a total of 14 reported transactions – slightly higher than the two-year average of 13 reported transactions.
  Based on the highly fragmented nature of the industry, there is possibility of many smaller players and participants
  being active in M&A activity, without any public disclosure.
• Transaction volume for the quarter included both select asset acquisitions, including waste and recycling routes, as well
  as full buyout transactions. Purchasers included strategic operators, private-equity backed operators, and sponsor to
  sponsor transactions.
• The strong transaction levels have been a result of the low cost of borrowing, increased level of specialization and the
  desire of industry leaders to gain additional market share.
• Additionally, as a result of improving underlying commodity prices, including oil prices, there has been an increased
  level of consolidation among recycling companies as recycled plastics become more economical for downstream
  customers.

Source: Capital IQ. Data as of June 30, 2019, based on publicly disclosed information.
All figures are in USD unless otherwise stated.
                                                                                                                                              Page 7
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
MACROECONOMIC INDICATORS

The key external drivers that affect the waste collection and disposal industries in Canada include: world price of crude
oil, population of Canada, consumer spending and industrial capacity utilization. Growth in the industry is expected to be
fueled by rising consumption levels and increased regulations.

                                             WORLD PRICE                                                            POPULATION
                                              OF CRUDE                                                               IN CANADA
                                                                                                        40,000
                                   120

                                   100
                                                                                                        35,000
   Price / Barrel (USD)

                                                                  Population (000s)
                                    80

                                    60                                                                  30,000

                                    40
                                                                                                        25,000
                                    20

                                     0                                                                  20,000

                                             CONSUMER                                                            INDUSTRIAL CAPACITY
                                              SPENDING                                                               UTILIZATION
                                   1,600                                                                90
                                                                  Industrial Capacity Utilization (%)

                                   1,400
   Consumer Spending ($ billion)

                                                                                                        85
                                   1,200
                                                                                                        80
                                   1,000

                                    800                                                                 75
                                    600
                                                                                                        70
                                    400
                                                                                                        65
                                    200

                                         0                                                              60

Source: IBISWorld Industry Reports.
                                                                                                                                       Page 8
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
SELECT RECENT M&A TRANSACTIONS

                                                                 • Blue Point Capital Partners acquired TAS Environmental
                               Closed            May 2, 2019       Services LP from TEAM Partners, LLC for an undisclosed
                                                                   amount.
                               TEV               Not disclosed   • TAS Environmental Services is a U.S.-based emergency
    acquired                                                       response cleanup company, with industrial cleaning
                               TEV/EBITDA        Not disclosed     services including tank cleaning, environmental
                                                                   remediation and hazardous waste transportation.
                               TEV/Revenue       Not disclosed   • Blue Point Capital Partners, a U.S. private equity firm,
                                                                   expects to help advance TAS’s performance through
                                                                   acquisitions and data enhancement.

                                                                 • Waste Connection Inc acquired Mountain Waste &
                                                                   Recycling Inc for an undisclosed amount.
                               Closed            Apr 2, 2019
                                                                 • Mountain Waste & Recycling Inc is a Colorado-based
                                                                   materials management company, providing waste
                               TEV               Not disclosed
                                                                   removal services to residential, commercial, industrial,
    acquired
                                                                   and municipal customers.
                               TEV/EBITDA        Not disclosed
                                                                 • Waste Connections Inc is a leading provider of solid
                                                                   waste collection, transfer, recycling and disposal
                               TEV/Revenue       Not disclosed
                                                                   services in mostly exclusive and secondary markets in
                                                                   both the U.S. and Canada.

                                                                 • US Ecology Inc. has entered into an agreement to
                                                                   acquire NRC Group Holdings Corp in an all stock
                                                                   transaction for approximately $966 million including
                               Announced         Jun 24, 2019      the assumption of NRC’s debt and cash.
                                                                 • US Ecology will create a holding company and US
                               TEV               $966 million
                                                                   Ecology will receive one share of holding company for
    acquired
                                                                   each outstanding share and NRC shareholders will
                               TEV/EBITDA        15.7x
                                                                   receive 0.196 holding shares for each share of NRC.

                               TEV/Revenue       2.4x            • Upon completion of the transaction, US Ecology
                                                                   stockholders will own approximately 70% of the
                                                                   combined company, and NRC stockholders will own
                                                                   approximately 30% on a fully diluted basis.

                                                                 • Waste Management Inc. announced its plans to acquire
                                                                   Advanced Disposal Services Inc. from Canadian Pension
                               Announced         Apr 15, 2019      Plan Investment Board for $4.94 billion.
                                                                 • Advanced Disposal Services Inc. is the fourth largest
                               TEV               $4.94 billion     solid waste company based in the US, providing
    acquired                                                       collection, transfer, disposal, and recycling operations
                               TEV/EBITDA        12.7x             throughout 16 states.
                                                                 • Waste Management Inc. is the largest environmental
                               TEV/Revenue       3.1x
                                                                   services provider in North America and this transaction
                                                                   will grow its footprint and customer base even further.

Source: Capital IQ and company press releases.
All figures are in USD unless otherwise noted.
                                                                                                                    Page 9
WASTE MANAGEMENT, RECYCLING & REMEDIATION QUARTERLY UPDATE Q2 2019
INDUSTRY CONSOLIDATORS

The waste collection and services industry is a highly fragmented industry, with a number of regional players serving local
markets. Additionally, there are many different specialized services within waste collection that add to the fragmentation.
The industry is currently undergoing high levels of consolidation as large players, both public and private, and regional
players seek to add specialization, waste routes and market share through both vertical and horizontal integration. Below
we have highlighted the industry consolidators, based on the number of reported transactions since 2013.

HIGHLIGHTED BUYERS

Waste Connections, Inc. is an integrated    Waste Management Inc., through its        GFL is a diversified environmental services
waste services company that provides        subsidiaries,     provides        waste   company. GFL provides services in solid
non-hazardous solid waste collection and    management environmental services to      waste     management,       liquid   waste
disposal    services  to    commercial,     residential, commercial, industrial and   management and infrastructure, serving
industrial, municipal and residential       municipal customers in North America.     the Canadian and U.S. markets.
customers. Waste Connections is
currently the third-largest        waste
management company in North America.
                                                                                      Funding:
Funding:                                    Funding:                                  Private equity backed (BC        Partners,
Publicly listed (NYSE:ADSW)                 Publicly listed (NYSE:WM)                 Teachers Private Capital)

Recent News:                                Recent News:                              Recent News:
• Acquisition of Mountain Waste &           • Acquisition of Advanced Disposal        • Acquisition of Coastal Ladies Carting
   Recycling Inc. (Announced Apr 2019)         Services Inc. (Announced Apr 2019)        Inc. (Announced Mar 2019)
• Acquisition of American Disposal          • Acquisition of EnviroSolutions, Inc.    • Acquisition of Waste Industries Inc.
   Services, Inc. (Closed Dec 2018)            (Closed Apr 2018)                         (Closed Nov 2018)
• Acquisition of Groot Industries           • Acquisition of TLC Waste Disposal       • Acquisition of Smithrite Disposal Ltd.
   (Closed Jan 2017)                           Services (Announced Apr 2018)             (Closed Mar 2018)
• Acquisition of Progressive Waste                                                    • Acquisition of Deep Foundations
   (Closed Jun 2016)                                                                     Contractors Inc. (Announced Feb 2018)
                                                                                      • Acquisition of Carney’s Waste Systems
Source: S&P Capital IQ, Company websites.                                                Ltd. (Closed Feb 2018)
                                                                                                                      Page 10
PUBLIC COMPARABLE ANALYSIS
TRADING MULTIPLES & OPERATING STATISTICS

   (Figures in USD millions, except percentages and ratios)
                                                                    LTM Operating Figures            NTM Consensus Estimates     Valuation (LTM)
                                      MarketEnterprise Revenue Revenue           EBITDA     EBITDA   Revenue   EBITDA      EV/      EV/        EV/
     Company                            Cap     Value           Growth                      Margin    Growth   Margin   EBITDA   EBITDA    Revenue
     Large Capitalization Waste, Recycling, and Remediation

     Waste Management, Inc.           $48,996   $59,695       $15,099     3.7%   $4,247      28.1%      4.7%    28.3%    13.4x    14.1x       4.0x

     Republic Services, Inc.          $27,862   $36,455       $10,084     0.1%   $2,793      27.7%      4.9%    28.5%    12.1x    13.1x       3.6x

     Waste Connections, Inc.          $25,195   $29,091        $5,027     7.4%   $1,578      31.4%      8.9%    32.2%    16.5x    18.4x       5.8x

     Median                           $27,862   $36,455       $10,084    3.7%    $2,793      28.1%      4.9%    28.5%    13.4x    14.1x       4.0x
     Mean                             $34,017   $41,747       $10,070    3.7%    $2,873      29.1%      6.2%    29.6%    14.0x    15.2x       4.5x

     Small Cap & Specialty Services

     Stericycle, Inc.                  $4,347     $7,505       $3,421    -4.5%     $678      19.8%     -0.3%    20.0%    11.0x    11.1x       2.2x

     Clean Harbors, Inc.               $3,972     $5,492       $3,331   10.8%      $490      14.7%      4.1%    15.1%    10.5x    11.2x       1.6x
     Advanced Disposal Services,
                                       $2,836     $4,748       $1,578     3.4%     $389      24.6%      3.9%    27.8%    10.4x    12.2x       3.0x
     Inc.
     Covanta Holding Corporation       $2,341     $4,862       $1,863     3.2%     $317      17.0%      1.9%    23.7%    10.8x    15.3x       2.6x

     US Ecology, Inc.                  $1,315     $1,657        $577    12.3%      $119      20.7%      6.5%    23.8%    11.3x    13.9x       2.9x

     Casella Waste Systems, Inc.       $1,872     $2,410        $677    10.4%      $125      18.5%      7.6%    21.6%    15.3x    19.3x       3.6x

     Heritage-Crystal Clean, Inc         $608      $658         $423    14.7%       $36       8.5%      8.0%    12.8%    11.2x    18.3x       1.6x

     Charah Solutions, Inc.              $163      $412         $748    44.5%      $104      13.9%    -15.1%    10.6%     6.1x      4.0x      0.6x

     Median                            $2,107     $3,579       $1,163   10.6%      $221      17.7%      4.0%    20.8%    10.9x    13.1x       2.4x
     Mean                              $2,182     $3,468       $1,577   11.8%      $282      17.2%      2.1%    19.4%    10.8x    13.2x       2.3x

Source: Capital IQ. Data as of June 30, 2019.
LTM refers to last 12 months. NTM refers to next 12 months.
                                                                                                                                           Page 11
PUBLIC COMPARABLE ANALYSIS
TRADING MULTIPLES & OPERATING STATISTICS

   (Figures in USD millions, except percentages and ratios)
                                                                         Growth Rates               Profitability (LTM)         Credit Statistics
                                        Stock 52-Week % of 52W      EBITDA    EBITDA     5-Year    Gross      EBIT   EBITDA Tot Debt LTM EBITDA
     Company                            Price     High High          (CY+1)    (CY+2) EPS CAGR    Margin                    / EBITDA    / Int Exp
     Large Capitalization Waste Collection

     Waste Management, Inc.             $115       $117       98%       4%        7%        9%      38%       18%         28%     2.5x         10.9x

     Republic Services, Inc.              $87       $88       99%       5%        5%        9%      38%       17%         28%     3.1x          7.3x

     Waste Connections, Inc.              $96       $96       99%      10%        9%      12%       41%       17%         31%     2.8x         11.5x

     Median                               $96       $96       99%       5%        7%       9%       38%       17%         28%     2.8x         10.9x
     Mean                                 $99      $100       99%       7%        7%      10%       39%       17%         29%     2.8x          9.9x

     Small Cap & Specialty Waste Collection

     Stericycle, Inc.                     $48       $71       67%     -11%       10%        9%      39%       12%         20%     4.7x          6.1x

     Clean Harbors, Inc.                  $71       $77       92%       6%        5%      11%       30%        6%         15%     3.6x          5.9x
     Advanced Disposal Services,
                                          $32       $33       97%       4%        6%      12%       35%        6%         25%     4.9x          3.9x
     Inc.
     Covanta Holding Corporation          $18       $18       97%      -1%        5%      12%       30%        5%         17%     8.2x          2.2x

     US Ecology, Inc.                     $60       $77       77%      11%       10%      10%       29%       13%         21%     3.0x          8.9x

     Casella Waste Systems, Inc.          $40       $42       95%      12%        8%        0%      31%        8%         18%     4.5x          4.7x

     Heritage-Crystal Clean, Inc          $26       $29       91%      26%       25%      15%       20%        5%         9%      2.6x         22.5x

     Charah Solutions, Inc.                  $6     $12       47%     -48%       53%        0%      13%        9%         14%     2.5x          5.0x

     Median                               $36       $37       91%       5%        9%      11%       30%        7%         18%     4.0x          5.4x
     Mean                                 $37       $45       83%       0%       15%       9%       28%        8%         17%     4.2x          7.4x

Source: Capital IQ. Data as of June 30, 2019.
LTM refers to last 12 months. NTM refers to next 12 months.
                                                                                                                                            Page 12
PUBLIC COMPARABLE ANALYSIS
GROWTH, MARGINS & MULTIPLES
                   Revenue Growth (LTM)                                                       Median Revenue Growth (NTM)
         Waste Management, Inc.              4%                                           Waste Management, Inc.          5%
           Republic Services, Inc. NA                                                        Republic Services, Inc.      5%
          Waste Connections, Inc.              7%                                          Waste Connections, Inc.        9%
                   Stericycle, Inc. NA                                                               Stericycle, Inc.     NA
               Clean Harbors, Inc.                11%                                           Clean Harbors, Inc.       4%
  Advanced Disposal Services, Inc.          3%                                     Advanced Disposal Services, Inc.       4%
     Covanta Holding Corporation            3%                                        Covanta Holding Corporation         2%
                  US Ecology, Inc.                 12%                                             US Ecology, Inc.       6%
      Casella Waste Systems, Inc.                 10%                                  Casella Waste Systems, Inc.        8%
       Heritage-Crystal Clean, Inc                  15%                                 Heritage-Crystal Clean, Inc       8%
            Charah Solutions, Inc.                                          44%              Charah Solutions, Inc.       NA
                                  0%         10% 20% 30% 40% 50%
                                                                                                                        0%     2%      4%     6%        8%   10%
                                      Median 8.9%                                                                                     Median 4.7%

                     EBITDA Margin (LTM)                                                                  EBITDA Margin (NTM)
        Waste Management, Inc.             28%                                             Waste Management, Inc.             28%
           Republic Services, Inc.         28%                                                Republic Services, Inc.         28%
         Waste Connections, Inc.           31%                                              Waste Connections, Inc.           32%
                   Stericycle, Inc.        20%                                                        Stericycle, Inc.        20%
              Clean Harbors, Inc.          15%                                                   Clean Harbors, Inc.          15%
 Advanced Disposal Services, Inc.          25%                                      Advanced Disposal Services, Inc.          28%
    Covanta Holding Corporation            17%                                         Covanta Holding Corporation            24%
                  US Ecology, Inc.         21%                                                       US Ecology, Inc.         24%
      Casella Waste Systems, Inc.          18%                                           Casella Waste Systems, Inc.          22%
       Heritage-Crystal Clean, Inc         9%                                             Heritage-Crystal Clean, Inc         13%
            Charah Solutions, Inc.         14%                                                 Charah Solutions, Inc.         11%
                                      0%       10%        20%        30%    40%                                          0%               20%                40%
                                                      Median 19.8%                                                                       Median 23.7%

                        EV/EBITDA (LTM)                                                                   EV/EBITDA (NTM)
        Waste Management, Inc.              14.1x                                          Waste Management, Inc.             13.4x
           Republic Services, Inc.          13.1x                                             Republic Services, Inc.         12.1x
         Waste Connections, Inc.            18.4x                                           Waste Connections, Inc.           16.5x
                   Stericycle, Inc.         11.1x                                                     Stericycle, Inc.        11.0x
               Clean Harbors, Inc.          11.2x                                                Clean Harbors, Inc.          10.5x
 Advanced Disposal Services, Inc.           12.2x                                   Advanced Disposal Services, Inc.          10.4x
    Covanta Holding Corporation             15.3x                                      Covanta Holding Corporation            10.8x
                  US Ecology, Inc.          13.9x                                                   US Ecology, Inc.          11.3x
      Casella Waste Systems, Inc.           19.3x                                        Casella Waste Systems, Inc.          15.3x
       Heritage-Crystal Clean, Inc          18.3x                                         Heritage-Crystal Clean, Inc         11.2x
            Charah Solutions, Inc.             4.0x                                           Charah Solutions, Inc.          6.1x
                                      .0x         10.0x       20.0x        30.0x                                        0.0x              10.0x              20.0x
                                                  Median 13.9x                                                                           Median 11.2x

Source: Capital IQ. Data as of June 30, 2019.
“LTM” refers to last 12 months. “NTM” refers to next 12 months.
                                                                                                                                                         Page 13
PUBLIC COMPARABLE ANALYSIS
PERFORMANCE ANALYSIS
                                                            RELATIVE PERFORMANCE (Last 10 years)
                       300%
                                                                                                                                           280%

                       250%
                                                                                                                                          223%

                       200%                                                                                                                199%
Price Return (%)

                       150%

                       100%

                                50%                                                                                                         46%

                                    0%

                                         S&P 500                                       Dow Jones U.S. Waste & Disposal Services Index
                                         Large Cap Waste - Peer Group                  Small Cap & Specialized Waste - Peer Group

                                                   INDUSTRY PEER GROUP                               PEER GROUP PERFORMANCE
                                                   MEDIAN EV/NTM EBITDA
                                    17                                                        •   The sector experienced a recovery in public
                                    16                                                            market prices in Q1 2019 and Q2 2019
                                    15                                                15.0x       following a correction at the end of 2018.
                                    14                                                            This price appreciation in public equities has
                                    13                                                13.0x
                                                                                                  outpaced corporate earnings growth, which
         EV / NTM EBITDA Multiple

                                    12                                                            has resulted in significant valuation multiple
                                    11
                                                                                                  expansion.
                                    10
                                     9                                                        •   The median EV/NTM EBITDA multiple for the
                                     8                                                            large cap waste management peer group
                                     7
                                                                                                  currently trades at 15.0x, while the small cap
                                     6
                                     5                                                            and specialized waste peer group trades at
                                     4                                                            13.0x.
                                     3
                                     2
                                                                                              •   The Large Cap Waste – Peer Group has
                                     1                                                            outperformed the S&P 500 over the most
                                     0                                                            recent 10-year period, ending June 30, 2019.

                                                                                              •   The Small Cap & Specialized Waste – Peer
                                                                                                  Group has underperformed S&P 500
                                         Large Cap Waste - Peer Group                             significantly, lagging by 153% over the 10-
                                         Small Cap & Specialized Waste - Peer Group
                                                                                                  year period.

Source: Capital IQ. Data as of June 30, 2019.
                                                                                                                                        Page 14
PUBLIC COMPARABLE ANALYSIS
PERFORMANCE ANALYSIS
                                                  BENCHMARK PERFORMANCE (LTM)
                       40%

                                                                                                                               33%
                       30%                                                                                                     29%

                       20%
    Price Return (%)

                       10%
                                                                                                                               7%
                                                                                                                               4%
                        0%

                       -10%

                       -20%

                       -30%

                              S&P 500                                         Dow Jones U.S. Waste & Disposal Services Index
                              Large Cap Waste - Peer Group                    Small Cap & Specialized Waste - Peer Group

                                                   LAST 12 MONTHS PERFORMANCE
•        Equity markets experienced volatility in 2018 as a result of many factors including Brexit, trade tensions, government
         policies and a fear of slowing corporate growth.

•        Q4 2018 results in a significant paring back in stock performance from the year.

•        The public waste industry participants experienced this volatility and closed the year erasing previous gains achieved
         during 2017.

•        Alongside the overall equity markets, the Large Cap Waste – Peer Group has rebounded in Q1 2019 and Q2 2019,
         outpacing S&P 500 during the quarter, ending June 30, 2019 with a gain of 33% over the last-twelve months.

•        The Small Cap & Specialized Waste – Peer Group has seen strong price appreciation in Q1 2019 and the first month of
         Q2 2019. However, the index has declined within the following two months of Q2 2019 and overall has realized a
         return of 4% throughout the last twelve months.

Source: Capital IQ. Data as of June 30, 2019.
                                                                                                                           Page 15
MNPCF – LEADERSHIP TEAM
                                   TRANSACTION LEADERSHIP

      Brett Franklin            Erik St-Hilaire          Aleem Bandali            Dale Antonsen
         President           Managing Director         Managing Director        Managing Director
  brett.franklin@mnp.ca    erik.st-hilaire@mnp.ca    aleem.bandali@mnp.ca     dale.antonsen@mnp.ca
      204.336.6190              204.336.6200             778.374.2140              250.979.2578

     Mike Reynolds             Mark Regehr                 Dan Porter             Stephen Shaw
   Managing Director         Managing Director         Managing Director        Managing Director
 mike.reynolds@mnp.ca       mark.regehr@mnp.ca         dan.porter@mnp.ca      stephen.shaw@mnp.ca
     587.702.5909              780.969.1404               416.515.3877            416.515.3883

     Kevin Tremblay            Jason Burgess              Patrick Khouzam          Craig Maloney
   Managing Director         Managing Director          Managing Director       Managing Director
 kevin.tremblay@mnp.ca     jason.burgess@mnp.ca      patrick.khouzam@mnp.ca   craig.maloney@mnp.ca
      647.943.4051              905.225.1324               514.228.7874            902.493.5430

                                   DUE DILIGENCE LEADERSHIP

                              John Caggianiello            Johnny Earl
                             Managing Director          Managing Director
                          john.caggianiello@mnp.ca     johnny.earl@mnp.ca
                                416.513.4177              604.637.1514
                                                                                              Page 16
MNPCF – RECENTLY CLOSED DEALS

                      NATIONAL

                                 Page 17
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