Sanlam Private Equity (SPE), has acquired a controlling stake in SkipWaste, a provider of integrated waste management solutions to commercial, industrial and retail clients primarily in Gauteng. SPE, a division of Sanlam Investments, made the acquisition through its new private equity fund, SPE Mid-Market Fund I.

SkipWaste becomes the fourth acquisition in the Fund, following that of Cavalier Group, Absolute Pets and Q Link, announced in May last year.  

Gift Pule, Investment Associate at SPE, said the waste management industry in South Africa has seen a lot of private equity activity from local and global players, which is positive for the economy and the environment.

“Besides its long track record, strong market share in waste logistics and experienced management, SkipWaste was particularly attractive to us as it neither owns nor operates landfill sites and it has a strategic focus on diverting waste towards alternative and more sustainable forms of waste disposal.”  

He said the business is now poised for growth and diversification through diversion of various organic, food and construction waste from more clients seeking “greener” waste management solutions and increased contribution to the circular economy through recycling and conversion.  

SkipWaste has been family-owned and run since inception in 1984, with CEO Susan McDonald, at the helm for almost two decades.

It operates out of three strategically located depots across Gauteng several transfer stations and a 13-hectare waste treatment facility in Springfield, located south of the Johannesburg central business district.   

McDonald said: “SkipWaste is excited to partner with our first institutional investor, with a sustainable waste management strategy, capital for growth and commercial expertise to unlock the company’s full potential. Having been a part of this business for most of my life, it was important for us to select the right partner to help us realise our next growth phase”. 

It is estimated that South Africa generates approximately 108 million tons of total waste annually, 90% of which still goes to landfills. 

Paul Moeketsi, Managing Partner at SPE, said: “given our credentials as a black fund manager in terms of the BEE Codes of Good Practice, SkipWaste is set to become the largest majority black-owned integrated waste management solutions provider and a preferred waste-partner for clients looking for greener waste solutions.”

“Our plan is to conclude between 8 and 12 investments in this fund. SkipWaste is our fourth investment in the fund and the acquisition significantly advances our investment programme in this fund, which is set to achieve final close by 31 March 2023. We were attracted to SkipWaste by its uniqueness in the waste management sector and we are excited to partner with the management team of the business. Coupled with the need for sustainable waste management practices and recent legislative changes to reduce landfill disposal, we are looking forward to supporting its waste diversion and diversification strategy in its next growth phase.

“SkipWaste is labour-intensive and we expect that it will continue to grow its current staff complement of 454 employees – this aligns strongly with our impact objectives around job preservation and growth. Overall, youth accounts for over 75% of the staff, which is majority black and from historically disadvantaged backgrounds,” Moeketsi concluded.

SkipWaste was exclusively advised by Novitas Capital Advisors. "SkipWaste attracted considerable interest from international and local suitors. Susan and the management team selected SPE based on strong cultural fit, shared values of responsibility for SkipWaste’s employees and a sense of environmental stewardship,” said Dana Gordon-Davis, director of Novitas Capital Advisors.