Posted with permission from:
ENVIRONMENTAL BUSINESS JOURNAL®
Strategic Information for a Changing Industry
The Waster Management Industry
Environmental Business International, Inc.
HALLE CAPITAL FORMS TRUE ENVIRONMENTAL AS A PLATFORM
Backed by Halle Capital, True Environmental (New York, N.Y.) is building a platform to partner with and grow businesses in the environmental consulting, testing, inspection, and certification industry. Halle Capital is a private equity firm focused on growth-oriented investments. Halle seeks to invest in mission driven management teams who promote strong culture throughout their organizations and pursues opportunities in healthcare services and business/consumer services sectors, including animal health, value-based care, and route-based service providers, bringing growth capital and strategic guidance to help drive expansion and sustainable growth.
Jim Stamatis has over three decades of experience in the environmental industry. An environmental engineer by training, he started at Louis Berger in 1985 and, after responsibilities including President of International and President of North America, was appointed CEO of the company in 2015. During his tenure as CEO, he grew the company’s revenues by 65 percent to over $1 billion and the company’s EBITDA by more than 600 percent. In addition to organic growth, Jim oversaw the acquisition and integration of a number of strategically important businesses which extended his company’s service offerings. In 2018, he led Louis Berger’s successful sale to WSP, a publicly traded global professional services firm.
EBJ: Congratulations on your partnership and the launch of True Environmental. Private equity firms entering our industry typically acquire a platform of significant size, but it appears True Environmental will be built from the ground up.
Jim Stamatis: A major differentiator between Halle and other financial sponsors is that Halle initiates new investments in partnership with industry executives. When they approached me, I was immediately impressed by their industry knowledge and extensive experience building and scaling platforms.
In the time we have worked together, I’ve collaborated with them to identify and evaluate prospective acquisition targets rather than being brought in as part of the team post-acquisition. The initial opportunities we’re considering are environmental firms with revenues of about $25 million to $150 million, and we are evaluating companies across all media (air, water, soil, etc.) and service lines (consulting, permitting, surveying, etc.). We will work with our initial partner or partners to build our platform both organically and via targeted acquisitions.
EBJ: What is the smallest firm that you would consider acquiring?
Stamatis: As mentioned, we’re considering environmental firms with revenues of about $25 million to $150 million for our initial acquisition. However, there is no minimum size threshold if we believe the firm would add value through additional technical capabilities, client relationships, or geographic reach. Culture is one of the most important factors in any business and one we are incredibly focused on as we evaluate partnerships.
EBJ: Does True Environmental have a geographic focus?
Stamatis: We are focused on the United States and Canada and plan to be geographically opportunistic within this territory. Our primary focus remains on the quality of service delivery, culture, and partnership fit.
EBJ: How aggressively do you expect to get involved in some of the newer markets like renewable energy, ESG, climate risk and resilience or NetZero planning and execution?
Stamatis: All of these areas are high growth markets and present significant opportunities. Accordingly, we are looking to partner with firms that have existing capabilities in these markets and firms that can grow into these markets organically or through targeted acquisitions. Many companies are increasingly focusing on ESG, climate risk, and resiliency planning, but we believe we are still in the early stages. These areas will continue to evolve, and we look forward to helping clients successfully navigate the necessary requirements.
EBJ: Which markets are of greatest interest to True Environmental?
Stamatis: We are interested in all markets where environmental services are needed, including water/wastewater, infrastructure, power, energy, transportation, industrial, and mining.
EBJ: Regulatory drivers continue to be the mainstay of many service categories in environmental consulting. Are you comfortable with that? What is your rationale for targeting testing, inspection and certification?
Stamatis: We embrace regulatory changes as they drive an increasing need for environmental consulting services. Any regulation that mandates consulting, testing inspection, or certification creates non-discretionary spend that benefits environmental companies. We believe regulatory drivers have been important since the Clean Water Act and have continued to increase in importance as we gain a better understanding of the impacts of growth and delayed inaction to repair and rehabilitate our environment. That said, increasing awareness of environmental issues by companies and the public is also creating demand for environmental consulting services. This awareness is driving institutional investors, consumers, and industrial clients to look to minimize risks and be more responsible partners to their communities and customers.
BJ: How important is the experience of seasoned industry leadership when developing a platform strategy?
Stamatis: The differentiated approach of starting a platform strategy with a seasoned executive such as myself already in place should create a great opportunity for us. In being involved from the start, I’m able to help shape company culture and build a top-tier executive team to support the growth and success of our platform. We intend to build out the platform team with industry professionals that possess deep experience in several areas, including business development, finance, human resources, and digital solutions, to help support and grow our partner businesses.
Industry Veteran Sees Opportunities For Growth And Consolidation In Environmental Industry
In September 2022, Halle Capital announced it was partnering with seasoned environmental services executive Jim Stamatis to launch True Environmental (New York, N.Y.). True Environmental is building a platform to partner with and grow businesses in the environmental consulting, testing, inspection, and certification industry. “I am excited to partner with Halle Capital to build a leading environmental consulting company,” said Stamatis. “Halle has demonstrated their ability to successfully launch platforms in highly fragmented industries with a strong operational focus. Their experience in working with entrepreneurs makes them a great partner to embark on this journey with True Environmental.
“After many years of working in this industry, I am convinced we are still in the early innings for growth and consolidation. We see exciting opportunities to partner with owners to provide liquidity and succession solutions, growth capital to broaden their service offerings and assistance with other functions such as accounting, human resources, and marketing. Together, we’ll build a diverse set of capabilities to solve our country’s biggest environmental challenges while creating fulfilling and rewarding career paths for our talented employees.”