Tide Rock Gains ITAD Arm
Tide Rock, a private equity firm, has recently taken control of the ITAD subsidiary belonging to Sipi Metals. This acquisition will greatly enlarge the scale of Tide Rock’s already existing electronics reuse and recycling business.
Headquartered in San Diego, California, Tide Rock has incorporated the assets of Sipi Asset Recovery from both the United States and Latin America into its electronics processor, Full Circle Electronics (FCE). The merger has resulted in a 400-person staff and 11 facilities across the Americas, but does not include the precious metals-oriented operations of Sipi Metals, a Chicago-based company.
“Combining two high integrity ITAD and recycling businesses not only benefits existing Fortune 500 clients but better serves the growing IT and electronics asset disposition market,” The CEO of FCE, Tracey Haslam, stated in a press release. “Our combined footprint creates better sustainability partnerships, more efficient logistics across locations, and enables us to create a balanced workload for faster, and safer, corporate pickup and processing.”
Creating a Large Company
In an interview, Haslam spoke about how her journey began with FCE in Arizona. She had established the Phoenix outlet of Westech Recyclers before she branched out to Westminster, Colorado and conducted business there under R2 Disassembly. Her next move was purchasing Atlanta Recycling Solutions in Georgia, which then formed what is now known as FCE. Several months later, in February of 2022, Tide Rock purchased Cal Micro Recycling from Ontario, California which specialized in electronics recycling and reuse.
2022 also saw the acquisition of FCE by Tide Rock, although Haslam still retained a stake in the firm. As part of that deal, Recycle All Electronics (RAE), an electronics processor from Ocala, Florida was brought under the FCE umbrella by Tide Rock. Then, FCE officially welcomed Sipi Asset Recovery on July 25th to its family of locations with branches in Hayward, California; Chicago; Fort Worth, Texas; Mexico City; Bogota, Colombia; and Medellín, Colombia.
According to Haslam, the Sipi Asset Recovery facilities will undergo rebranding to become FCE by late 2023. These plants stand out from existing FCE sites in that their main focus is on reuse rather than a split approach between reuse and recycling. And prior to gaining Sipi ITAD, FCE had approximately 200 staff members. While figures of the transaction were not announced, another 170 individuals were added to the company’s roster.
Filling the Gap
Haslam stated that this purchase assists in FCE’s expansion into America’s northern region, noting a previous “geological gap.”
She observed that one of the most significant issues for customers relates to freight costs. By increasing its coverage area, FCE will be able to bring down delivery rates, increasing the firm’s business performance as well as helping its clients and reducing the environmental impact of shipping material from distant locations.
“Part of our value proposition is to make sure that we’re being the best environmental stewards that we can,” Haslam stated.
She remarked that the transaction will also significantly benefit electronics production by providing more scale and volume which is necessary for operation.
An “Unlevered Buyout”
Unlike most private equity firms, Tide Rock of Cardiff, Calif. near San Diego is an unlevered buyout firm. According to Candice Marshall, the Chief Marketing Officer at Tide Rock, this means that no long-term borrowing or debt is utilized with the intention of reselling down the line to pay investors back.
Rather than investing with a time-limit, Tide Rock has taken a different approach. As Marshall remarked, one of the firm’s investments has been in place for almost ten years. And in return, investors receive sizable quarterly returns.
Having gone through with the Sipi ITAD acquisition, FCE is now considering how to expand even further. However, purchasing assets rather than a corporate entity has meant that administratively incorporating them into FCE is a process which will take longer than originally planned, so its targeted growth may be delayed.
