Waste Management Inc.’s purchase of Greenstar LLC both complements and supplements the company’s existing recycling assets, says the president of its recycling operation.

And while there are some asset overlaps, the combination might better serve the market rather than eliminating operations, says William  Caesar, president of WM Recycle America LLC, in an interview.

Houston-based Waste Management bought Greenstar, also of Houston, from the Irish firm NTR PLC for as much as $220 million. Of that amount $180 million would be gross consideration, and up to an additional $40 million will come based on Greenstar performance criteria, payable by 2018, according to the Dublin-based NTR’s news release.

“It expands our geographic footprint and expands our capacity in a few metropolitan areas where will need more capacity over time,” Caesar says. “So it fits very nicely with our existing asset base.

“We need the incremental capacity because we’ve got more customer demand and we only see recycling rates going up, so it fits into what we’re trying to do as a company.”

Caesar says Greenstar was one of the two relatively large private independent material recovery facility (MRF) operators – the other being Charlotte, N.C.-based ReCommunity Recycling. “We’re able to add a significant slug of capacity in one move rather than trying to do six or eight transactions to get the same capacity.”

Greenstar has about 500 employees; revenue figures for the operation weren’t broken down, says Ken Haldin, director - communications & community relations for Waste Management. Greenstar has operations in Des Moines, Iowa; Normal, Ill.; Howell, Mich.; Akron and Poland, Ohio; Oklahoma City and Tulsa, Okla.; Dallas, San Antonio, Houston and Fort Worth, Texas; Pittsburgh and Allentown, Pa.; Kensington, Conn.; and Patterson and Monmouth County, N.J.

Greenstar has similar MRFs and brokerage businesses to Waste Management, and both serve printer and shredder operations. “They’ve got a business model similar to ours,” Caesar says. “It fits not only asset-wise but culturally. I think were going to be very closely aligned.”

As for overlapping operations, Caesar says there are a couple places where the firms have multiple assets, “but that doesn’t necessarily mean we’ll shut them down. “ In south Florida Waste Management holds four or five different MRFs because of demand. San Antonio and Houston are two locations where both Waste Management and Greenstar operate, but the market will determine what the company needs.

“We’ll take a little bit of time to figure out exactly what that fit is and how we want to manage that,” he says.

Much of the consolidation of operations will occur during the next 60 to 90 days, but other decisions will happen over the next year. Back-office consolidation, for example, likely will happen sooner, but field operations may take longer and not involve any consolidation. “We’ll have to see how that plays out.”

Waste Management has a goal of managing 20 million tons of recyclable material annually by 2020. The Greenstar acquisition gets Waste Management’s capacity to about 15 million tons. The company expects to get there the same way it has reached the current point – a combination of acquisitions and new construction. Caesar says the company has several new plants on the drawing board for 2013 and recently closed an acquisition of two recycling operations in Tennessee from Louisville, Ky.-based QRS Inc.

NTR said of selling Greenstar, “This sale makes strategic sense for us, in the context of consolidating our portfolio and allowing us to focus on our strategy of driving future growth in the renewable energy sector,” said Michael McNicholas, NTR CEO.

And it fits with Waste Management’s strategy as well. “This is a continuation of Waste Management’s strategy to be able to serve our customers as well as we can, and the importance of adding recycling assets to our business today and  going forward,” Caesar says.