Predicting M&A activity with any certainty can be risky, but there are many reasons to be optimistic throughout 2026 and into 2027.
By Leon Vayntraub and Andy Schwartz
M&A activity in the waste industry has remained consistent over the past several years, highlighting significant resilience in the face of macro challenges and uncertainty that the broader market has been experiencing. 91²Ö¿â, however, is a sector that does not, in large part, have exposure to geopolitical or tariff risks or to supply chain concerns that are seen in other markets. What the waste sector does have is recurring essential services offered under long-term inflation-protected contracts, strong margins and cash flow characteristics, operational benefits to scale and density, and pockets of attractive fragmentation. Taken together, these factors support a strong trend of both new platform creation and continuing industry consolidation that should drive an increase in activity over the next several years.
Market Trends
91²Ö¿â sector M&A tends to operate at two speeds â stable and high. Currently, the waste industry is transitioning from stable into high speed given a confluence of factors that have developed over the past several years.
A waste executive recently said, âI love how recession-resistant the waste industry is.â That is a very true statement, but misses the broader attractiveness and resilience the industry has exhibited during a period of significant macro turmoil. While we may not have been in a true economic recession in ~20 years, there have been significant challenges that have impacted investor returns much like a recession would.
COVID reinforced that view, since the waste industry was deemed as part of the âessential workforceâ. The resulting supply chain delays and cost inflation shocked just about every industry; however, the waste industry at large has passed through inflation-pegged price increases and remains more profitable than ever. Now, we have seen that price-cost spread continue to expand coming out of that inflationary environment, leaving waste companies even more resilient during a time when other sectors are cutting pricing. And, just in the past year, we have seen impacts from DOGE cost cutting, from tariff policy and global trade, and from regulatory whiplash that the waste industry has largely shrugged off. The waste sector provides a recurring essential service that benefits from scale/density, and we believe is fundamentally underpriced in consumer wallets/budgets resulting in continued growth and margin expansion.
The waste sector tends to transact in stages or cycles and over the last five years there has been significant scale built in the private markets, with many private equity investments made from 2020 to 2023. Many of those investments are maturing and are heading into a market dynamic that is increasingly excited to receive those assets.
In addition, many family-owned businesses are continuing to see more consistent opportunities to consider liquidity options. Many entrepreneurs who have had success often recognize that as they scale, there are different types of investments that tend to be deemed riskier, but are often necessary to continue above-market growth trajectories (investments such as more robust technology systems, additional layers of management, and, of course, acquisitions). These dynamics can catalyze founder-led M&A transactions that result in a private equity partner coming in and investing in either a minority position or a full recap. Artificial intelligence (AI) represents another level of necessary investment to scale going forward that will provide additional investment opportunities. Many transactions deal with this dynamicâhigh quality entrepreneurs/businesses who are looking for not only a capital partner, but also a strategic partner to continue to grow and reinvest in their platform together before an eventual âglobal exitâ.
There are also many situations where successful entrepreneurs are ready to retireâsome of these business owners maybe did not pursue a traditional college path for example, but they have had tremendous success and their children, who are now graduating from top universities, and may prefer careers like law, medicine, etc., over waste. This results in a succession and estate planning dynamic that similarly provides a steady level of M&A flow.
Investment Strategies
There has been a persistent supply and demand imbalance in the waste sector that has historically been driven by strong acquisition appetite from consolidating strategics and, in recent years, supplemented with strong interest from infrastructure funds in search of yield.
Publicly traded waste strategics have, as a category, essentially acquired all of their volume growth in the past six years. They tend to focus on optimizing pricing and margins over customer service, providing an attractive dynamic for smaller companies to compete effectively on the basis of strong customer service and not just price. This dynamic has also attracted infrastructure funds who are focused on maximizing the yield on their investments (which benefits from strong price increases). Today, many infrastructure funds have at least one waste investment in their portfolio, and we see that trend continuing.
More recently, more traditional private equity firms with higher return requirements (including family offices) are increasingly focused on the waste sector in search of growth, risk diversification, and superior risk-adjusted returns. A key reason is that in 2025, and now in 2026, there is an increasing premium being placed on stability due to macro volatility impacting most other sectors. These factors do not have as direct an impact on waste, so institutional investors can âring fenceâ potential risk better and get a bit more aggressive, especially in underwriting option value/upside.
If you are in a growth market like the southern U.S., you are seeing a lot of investors show up and not just infrastructure funds. In fact, many of these traditional investors who have always liked waste thematics are getting more aggressive and starting to compete more with infrastructure funds on value. That is a shift from the last five years.
One of 2025âs most impactful transactions was GFL Environmental divesting its Environmental Services division. While GFL is still the largest equity holder in the division, they brought in two private equity firmsâApollo and BC Partnersâas investment partners. The strategic impact this transaction had was to deleverage GFLâs balance sheet and allow them to resume a more aggressive posture on M&A. That has been a welcome development in the M&A market, and should GFL elect to go private, we would expect a yet more aggressive consolidation posture. It is also important to look at the GFL divestitures that occurred in 2023, including selling GFLâs operations in Pennsylvania/Maryland/Delaware to Casella 91²Ö¿â, enabling them to move into the Mid-Atlantic and extend their acquisition/consolidation leadership into an attractive new market. That has been a nice driver of growth for Casella.
First Steps to M&A
Today, the first step any business owner should take when considering a merger or acquisition is to hire an investment banking advisor. Advisors are increasingly becoming engaged earlier in the deal lifecycle. Preparation is critical to an effective and robust M&A process, and we have been engaging earlier than ever, as much as six to 12 months in advance of a process, ensuring optimal preparation and strategic positioning. This includes tactical preparation, such as making sure contracts are all updated and rolled forward, or having appropriate accounting, legal, labor, and benefits in place to ensure smooth diligence process. We also need to consider strategic preparation in terms of how the story enters the market. For example, what are the ultimate goals of the owner? Is it estate planning or are other motives that need to be considered?
Having a strong and experienced advisor who understands what those objectives are early-on can custom tailor a process to help achieve those objectives. It is not always about just maximizing valueâalthough that is usually near the top of the list. Tax implications and estate planning, succession planning, treatment of long-time employees, cultural considerations, management bandwidth, and confidentiality, are just some of the factors we take into account when designing optimal process architecture.
Future Predictions
Predicting M&A activity with any certainty can be risky, but we see a lot of reasons to be optimistic throughout 2026 and into 2027. In terms of relative resilience and durability, you typically see attractive (contracted) revenue stability, coupled with continued strong pricing and margin performance across the sector, as opposed to other industries. There also remains attractive âoption-valueâ for growth, whether through transformative acquisitions (which often carry attractive synergies), an acceleration of trends around industrial onshoring and overall production volumes, and importantly, AI.
As we think about AI, the waste industry is likely to be among the largest beneficiaries. The reason for that is you have contracted revenue on the one hand, and, on the other, a widening price-cost spread that is driving margin expansion across an industry. AI will further enhance that spread through more efficient cost management (e.g., dynamic route optimization for factors like driver overtime, more efficient fleet maintenance, automating customer service, and other back-office functions, improved billing, etc.).
Ultimately, there are many reasons for both strategics and institutional investors alike to continue to deploy capital into the waste industry. We expect to see continued capital markets activity in the sector for the foreseeable future. | WA
Leon Vayntraub is a senior member of Raymond Jamesâ Commercial and Industrial Services practice and is actively involved in the firmâs coverage of the 91²Ö¿â services sector. Leon has executed over $10 billion in transaction value and brings more than 15 years of investment banking and M&A experience working with publicly traded, private equity-backed and family-owned businesses to build and realize shareholder value. He can be reached at (312) 655-2607 or email [email protected].
Andy Schwartz is a Managing Director and Co-head of the Commercial & Industrial Services group. He is actively involved in the firmâs coverage of the 91²Ö¿â services sector. Prior to Raymond James, Andy was a senior banker in the Business Services group at Lincoln International where he led M&A and capital raising transactions in the facilities and industrial services, environmental and waste services, utilities and infrastructure services, and rental services sectors, among others. He has worked on behalf of leading private equity funds, private companies and public company clients. Prior to Lincoln International, Andy held private equity and investment banking roles at American Capital and Piper Jaffray. He can be reached at (312) 655-2629 or e-mail [email protected].
The waste sector has been the longest continuously covered sector at Raymond James dating back to the mid-1990s. The sector is a priority focus area for the firm and one in which Raymond James maintains deep and established relationships and insights.