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Synagro

Synagro is the leading North American 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 34 states and the District of Columbia in the U.S. and Canada. 

The Company’s services 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 North American market leader for biosolids management, with a footprint multiple times 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.

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 (eleven facilities, with two additional currently under construction) and composting (seven facilities) of biosolids
  • Services: Dewatering, transportation and beneficial re-use, residual program management, maintenance and centrifuge repair, clean-outs, facility maintenance, and emergency work
  • Rail: Nationwide rail transport of biosolids and waste material

To Synagro

Market trends and drivers

Synagro has an addressable market which is estimated to be USD 2.7 billion in the U.S. and the market is forecasted to grow at ~3% annually. The Company’s market has demonstrated stable characteristics driven by population growth, outsourcing of municipal services, 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 the stable revenue and cash flow based on long term contracts with high renewal rates, the asset based business model providing an essential service to society, and the stable underlying market with positive growth prospects.

The main value creation opportunities are in growing the asset base (e.g. construction of new facilities), 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.