Case Study: VLS Recovery Services

VLS.jpg

VLS Recovery Services is a leading provider of waste services. They offer waste stream management, cleaning up waste by reselling salvageable materials and disposing the rest, and also provide specialized railcar cleaning for freight carriers. The company has locations in Texas, South Carolina, Georgia, Tennessee and Alabama. Graycliff exited the business when management completed a buyout.

Headquarters
Hockley, TX

Industry
Waste Management

Investment Date
November 2010

Status
Realized


Transaction Dynamics

Graycliff first entered VLS by funding a management-led carve-out of the business from a publicly held Dutch company called VoPak N.V. The waste management and railcar cleaning operations were essentially “orphaned” assets in the U.S. We later sold the carved-out business in full to its American management team through a buyout.


Investment Thesis

  • Partner with the existing management team to re-energize the U.S.-based assets, which we viewed as underutilized by the Dutch parent company

  • Strategic advantage as the leading independent provider of specialized chemical tank car cleaning

  • Favorable regulatory tailwinds in terms of railcar inspections and demand for cleaning services

  • Supportive sentiment and demand trends for greener disposal of industrial waste streams

  • Sizeable revenue opportunities given a largely installed customer base among Fortune 500 companies


graycliff Value Enhancement

  • Invested in capex and facility expansion to increase railcar cleaning capacity

  • Streamlined operational flow with the aid of consultants

  • Recruited company’s first CFO

  • Used strategic guidance of Graycliff operating partner through carve-out, transition and exit process


I can’t thank them enough for what they did for me and for my company.
— Mike Dilick / CEO / VLS Recovery Services