California firm buying Sanipac: The longtime local trash hauler says customers will see little difference in service under a new owner

Jul 17, 2009 (The Register-Guard - McClatchy-Tribune Information Services via COMTEX) -- WCNX | Quote | Chart | News | PowerRating -- A sale of Sanipac, the main trash hauler in Eugene and Springfield, is in the works.

In late June, Sanipac's owners signed a "definitive agreement" to sell the business to Waste Connections, a garbage collection company based in Folsom, Calif., Sanipac general manager Rick Wichmann told The Register-Guard on Thursday.

The sale would include Sanipac's Glenwood operations, its EcoSort recycling subsidiary and its Eugene Drop Box subsidiary, which handles construction/demolition waste.

A purchase price was not disclosed. The companies are hoping to close the sale on July 31, pending various approvals, Wichmann said.

After three decades of ownership, Sanipac's shareholders decided it was time to sell, Wichmann said. The shareholders include several members of Eugene's Pape family and Bob Fenstermacher, CEO of LibertyBank, which is primarily owned by the Papes.

"The owners are pretty close to retirement age," Wichmann said. "For personal reasons they felt it was time for them to move on."

So more than a year ago the owners started searching for a viable buyer that would be a good fit for the community, Wichmann said.

"Ultimately Waste Connections and the shareholders came to an agreement, so here we are," he said.

Waste Connections CEO Ronald Mittelstaedt did not return calls from The Register-Guard on Thursday.

Waste Connections will continue to use the Sanipac name in this community, Wichmann said.

Sanipac's 145 employees and 60,000-plus customers shouldn't notice much of a difference under the new owners, he said.

The employees will continue to be employed by Sanipac, Wichmann said, and customers will see the same faces in the same blue Sanipac trucks coming to pick up their trash on the same scheduled day.

"Waste Connections looked at Sanipac as one of the leaders in the industry, and they're just absolutely thrilled in what we do and the way we do it," he said. "They don't want to change anything. They want to see if they can improve upon it."

Sanipac serves both Springfield and Eugene. However, the two cities have different types of agreements with the trash hauler.

In Springfield Sanipac has an exclusive franchise to collect garbage. As part of that 5-year rolling franchise, the city council must decide whether to accept or reject the transfer of franchise ownership from Sanipac to Waste Connections. The council will take up that question on Monday.

"We're recommending that they authorize the transfer of franchise ownership," said Len Goodwin, assistant public works director. "We've examined (Waste Connections') financial record, their company history, and communicated with a number of cities where they own the franchise. Everything we've seen does indicate that they have the ability to comply with the franchise and to comply with our municipal code."

Should Waste Connections become the new franchise owner and seek to change rates or service levels, the council would have to approve those changes, Goodwin said. Garbage collection "is sort of an essential service, and I think our council considers it very important that that service is as affordable as it can be," he said.

Sanipac does not have an exclusive franchise in Eugene, Wichmann said. It's one of a half dozen licensed garbage haulers. So Sanipac's agreements with Eugene do not require the city to approve a transfer in franchise ownership, he said.

However, Eugene does set and regulate trash hauling rates through administrative rules, which must be approved by the city manager, Wichmann said.

Waste Connections serves more than 1 million customers from its operations in 23 states, according to its Web site.

The company was founded in 1997 and went public in May 1998. Its shares trade on the New York Stock Exchange.

The company reported revenue of $262.7 million in the first quarter, up 4.9 percent from $250.3 million in the first quarter last year. Net income, or profit, fell, however, mostly because of accounting issues. Profit was $22.3 million in the first quarter, compared with $25.8 million in the first quarter last year.

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