Eagle River Capital’s Miller Makes Strategic Investments in Waste Industry

For this Q&A interview, we sat down with Waste360 40 Under 40 award recipient Eric Miller, co-founder and partner at Eagle River Capital, to discuss his pathway into the industry, and why he believes waste management presents a smart investment opportunity.

Miller focuses on business development, mergers and acquisitions, strategy, and investor relations. Eagle River Capital is also the holding company for HBS Trash, which provides residential and commercial waste management services, primarily in Colorado.

Waste360: When did you found Eagle River Capital?

Miller: We started it in 2017. There are three of us that started it together. Brian Cleveringa and I have done similar operational investment strategies in a couple different industries. The third partner is my dad, who has been an operator in the garbage industry since before I was born.

Brian and I had sold another business about the same time, and my dad was contemplating retiring. He was not exactly sure what to do next. We had a group of investors who were interested in investing [in something new] and my dad had a number of waste industry folks who were interested in investing in anything that he was thinking about doing. It was good timing across the board.

Waste360: Why were you interested in pursuing an investment opportunity in waste management, specifically?

Miller: From growing up around it—it's always been an industry that I was interested in. I've always thought that, for a number of reasons, there are a lot of good aspects to it, for doing a strategic investment with financial investors. Our investors are more of the long term, family office types, so it has a lot of good attributes that match up well with our investor group.

It certainly was influenced by having an operator like my dad who was willing to work with us on it. That's kind of been our strategy, or our formula, in other industries, where we bring the strategy in the investing side, partner with good operators, and learn the business from them. Even though we get involved in it, we feel like if we have the right partner there, we can learn all the things that we need to learn about the business. That has worked well for us in the past.

Frankly, it comes down to it being a business that both I and my partner have always liked. Obviously, my dad has always loved it because he's been in it his whole career. He was the SVP [Senior Vice President] of operations for Progressive Waste Solutions. When they were selling to Waste Connections, he was kicking around the idea of retiring altogether or buying a small business somewhere. Doing an investment like this is something that my dad and I have thought about for a long time. I wrote some papers on this type of investment when I was getting my master’s degree. It's something that we've kind of always kicked around and it just came together that the timing was good for it.

Waste360: What professional path led you here?

Miller: I actually started my career with a hedge fund that used several different strategies. The guys who started that hedge fund had made a lot of money and had kind of a small entity that invested in businesses, and it was not something that any of them were really all that interested in. I helped out with that, and I learned early in my career that I was more interested in investing in businesses than the stock market.

I started to look for an opportunity to develop that skill and I ended up with Fidelity Investments. The family that owns it, used to have a private equity arm called Devonshire Investors. I took a job working inside one of their portfolio companies that was very mergers and acquisitions focused. We were kind of doing the private equity side of that company. It was called ProBuild, and it was a roll up of building product distributors. I went there in 2007, just in time for the world to melt down.

Interestingly though, I learned a lot by going through a major kind of downturn, a major recession. We did a lot of very interesting things there; did a lot of mergers and acquisitions, as the market was collapsing. Ultimately, they made the decision in 2010 that they were going to start to wind that investment down. At that time, myself and four others split off and basically did the same strategy, and started a roll up of building products.

Waste360: When you're evaluating a new acquisition opportunity, what are some things you find attractive in a business that you might acquire?

Miller: We’ve acquired eight businesses, all within the waste industry. I personally like it when there is an aspect of the business that's a little bit different, for one reason or another. We pride ourselves on being able to see things through a different lens than other potential investors. Specifically, for the garbage industry, for us, we're always more focused on commercial routes than residential routes. We have a very large commercial business that has a heavy construction element to it. We're always looking to add to the diversification of the business and add to the reoccurring revenue stream.

We have some very interesting niches where we do really well, from a competitive standpoint. It's kind of like a big puzzle. How does this piece fit within our existing company? Does it make strategic sense because it's an expansion into a new geographic area or it's an enhancement of a current geographic area? Is there customer overlay? Is there equipment overlay?

It depends from acquisition to acquisition. There's been a lot of consolidation in this market in Colorado. It's been a highly competitive market from an acquisition standpoint.

Waste360: What is an example of a waste solution your company has worked with partners to create to serve the local community?

Miller: They passed new legislation in Denver, and there's a lot of additional recycling, particularly on the construction side. We're working with all of our biggest customers right now to help them comply with all the new recycling mandates.

We also have a partnership with TerraCycle for our homeowner customers. They can buy plastic bags where they can recycle hard-to-recycle items and then send them to TerraCycle, who has partnerships with vendors that can recycle those items.

As far as providing solutions for our customers, we're very tech focused. Brian and I like to scale technology wherever possible. We've drastically increased every business that we've bought; we've drastically increased our ability to communicate with customers and provide them with real-time information, accurate real-time information, by investing in cameras and GPS on the trucks. We have tablets in every truck and phone systems that can handle drastic changes in call volume.

In order to be competitive with the big public companies, we have to be very good at communicating with our customers, because that's really our advantage, that we're local and most of our customers have one or all of our three cell phone numbers, where they can get in touch with us. That's probably our primary focus.

Waste360: What’s on the horizon for your company?

Miller: We're continuing to build and grow organically, and we’re excited about that. For us, we're reaching the point where we're a little more in a steady state because there's not as much acquisition to do here, in the front range. It's always the conversation of, "Do we expand outside of this market, or not?"

It's an interesting time for the business and it's exciting for all of us. We're excited about everything that we've built.