vertically integrated waste services or expand the service area for our existing disposal sites.
Development projects, while generally less capital intensive, typically require extensive permitting
eÅorts that can take years to complete with no assurance of success. We undertake development
projects when we believe there is a reasonable probability of success and where reasonably priced
acquisition opportunities are not available.
‚ Acquisition Growth. During the late 1990's, the solid waste industry experienced a period of rapid
consolidation. We were able to grow signiÑcantly through acquisitions during this period. However, the
rate of consolidation in the industry has slowed considerably. Despite this, we continue to look to
acquire businesses that complement our existing business platform. Our acquisition growth strategy
focuses on privately-held solid waste companies and municipal and other local governmental authori-
ties. We believe that our ability to acquire privately-held companies is enhanced by increasing
competition in the solid waste industry, increasing capital requirements as a result of changes in solid
waste regulatory requirements, and the limited number of exit strategies for these privately-held
companies' owners and principals. We also seek to acquire operations and facilities from municipalities
that are privatizing, which occur for many of the same reasons that privately-held companies sell their
solid waste businesses. In addition, we will continue to evaluate opportunities to acquire operations and
facilities that may be divested by other publicly-owned waste companies. In sum, our acquisition
growth strategy focuses on:
‚ acquiring businesses that position our company for growth in existing and new markets,
‚ acquiring well-managed companies and, when appropriate, retaining local management,
‚ acquiring operations and facilities from municipalities that are privatizing and publicly-owned
companies that are divesting of assets.
For certain risks involved with our acquisition growth strategy, see ""Risk Factors Ì We may be
unable to execute our acquisition growth strategy,'' ""Ì We may be unable to manage our growth
eÅectively,'' and ""Ì Businesses we acquire may have undisclosed liabilities.''
Acquire Businesses Positioning the Company for Growth. In making acquisitions, we principally
target high quality businesses that will allow our company to be, or provide our company favorable
prospects of becoming, a leading provider of integrated solid waste services in markets with favorable
demographic growth. Generally, we have acquired, and will continue to seek to acquire, solid waste
collection, transfer and disposal companies that:
‚ have strong operating margins,
‚ are in growth markets,
‚ are among the largest or have a signiÑcant presence in their local markets, and
‚ have long-term contracts or franchises with municipalities and other customers.
Once we have a base of operations in a particular market, we focus on acquiring trucks and routes of
smaller businesses that also operate in that market and surrounding markets, which are typically
referred to as ""tuck-in'' acquisitions. We seek to consolidate the operations of such tuck-in businesses
into our existing operations in that market. We also seek to acquire landÑlls, transfer stations and
collection companies that operate in markets that we are already servicing in order to fully integrate our
operations from collection to disposal. In addition, we have in the past and may continue in the future
to exchange businesses with other solid waste companies if by doing so there is a net beneÑt to our
business platform. These activities allow us to increase our revenue and market share, lower our cost of
operations as a percentage of revenue, and consolidate duplicative facilities and functions to maximize
cost eÇciencies and economies of scale.
Acquire Well-Managed Companies. We also seek to acquire businesses that have experienced