Synagro

Number of Employees: 808
Sales: USD 310 million in 2015

Synagro is the leading U.S. provider of residuals management solutions & land application services, offering capabilities across the spectrum of wastewater environmental services. Synagro converts biosolids into environmentally friendly by-products, e.g. crop fertilizers.

Synagro was founded in 1986 and is headquartered in Baltimore, Maryland. The Company serves more than 600 municipal and industrial customers across 37 states and the District of Columbia in the U.S.

The Company’s leading systems and facilities help customers of all sizes save money and meet environmental regulation requirements through the beneficial re-use of the biosolids.

Synagro is the U.S. market leader for biosolids management, with a national footprint more than 5x larger than its closest competitor. It is a core infrastructure business with an asset based business model delivering an essential service to society through long term contracts.

In 2015, Synagro had sales of USD 310 million. The majority of the revenue is generated from long term contracts with high renewal rates, providing stable core cash flows and downside protection.

Synagro operates through several segments:

  • Facilities: Incineration (three facilities), drying (nine facilities) and composting (four facilities) of biosolids
  • Services: Dewatering, transportation and beneficial re-use, residual program management, maintenance and centrifuge repair, clean-outs, facility maintenance, and emergency work

To Synagro

Market trends and drivers

Synagro has an addressable market which is estimated to be USD 1.8 billion in the U.S. and the market is forecasted to grow at ~3% per year. The Company’s market has demonstrated stable characteristics driven by population growth, expanding municipal sewer networks and new legislation requiring higher treatment levels to enable beneficial re-use of the biosolids.

Investment potential

The key investment attractions for Synagro are:

  1. the stable revenue and cash flow based on long term contracts with high renewal rates,
  2. the asset based business model providing an essential service to society, and
  3. the stable underlying market with good growth prospects

The main value creation opportunities are in driving operational excellence across the facilities (e.g. increased capacity utilization), focusing the sales and marketing efforts (e.g. better product marketing and pricing of the end products), and applying active industrial governance.