Roark Capital Nears Deal With Fla. Trash Collector

Target: Waste Pro USA Inc.

Price: Undetermined

Sponsor: Roark Capital Group

Seller: Waste Pro USA Inc.

Roark Capital Group is poised to make an investment in Waste Pro USA Inc., a Longwood, Fla.-based trash and recycling collection company, according to a government filing.

The filing identifies Waste Pro USA Inc. as the target and the seller, though the company is a portfolio company of Ares Capital Corp., a New York-based business development company that invested $40 million in Waste Pro, according to an April 2007 story in Waste News, a trade publication.

Executives at Roark Capital declined to comment. Executives at Ares Capital could not be reached for comment.

Founded in 2003, Waste Pro provides trash and recycling services throughout Florida, Georgia, South Carolina and Alabama.

One aspect of the company to which Roark executives may be attracted is the recurring revenue the company enjoys through its contracts with various municipalities. On June 30, Waste Pro announced a new long-term contract to provide garbage, yard waste and curbside recycling to the 4,100 homes in Beaufort, S.C.; earlier this year it landed similar contracts with the cities of Hollywood, Fla. and Winter Park, Fla. Also, in April, Waste Pro acquired St. Pete Recycling Solutions, a provider of curbside recycling services based in St. Petersburg, Fla. Financial terms of that deal weren’t disclosed.

If the deal is completed, Atlanta-based Roark plans to make the investment out of Roark Capital Partners II, a $1 billion fund it closed in February 2008. The shop’s most recent deal came last month, when it agreed to buy Pet Valu Inc., a Canadian chain that sells pet food and supplies, for C$143.7 million ($123 million).

Roark typically invests between $15 million and $350 million in companies with revenues between $20 million and $1 billion and EBITDA between $10 million and $100 million. The firm’s areas of interest include franchises in the restaurant, retail, service and consumer products industry; consumer and business services, food, direct marketing and financial services. Neal Aronson, the former co-founder and CFO of U.S. Franchise Systems Inc., founded the firm in 2000.