Judging by the first 10 days of the new year, 2018 seems poised to be active in terms of merger and acquisition (M&A) activity in the recycling industry.

During the first two weeks of January, several large acquisitions were announced or finalized in different sectors of the recycling industry, particularly among metals and paper producers that consume scrap materials.

Ferrous scrap recyclers in North America saw several large-volume electric arc furnace steel mills change hands from Brazil-based Gerdau to Commercial Metals Co., based in Texas.

Recyclers in Europe received news about three consumer-related acquisitions in early January, with one proposed merger in the containerboard industry and two acquisitions in the aluminum production sector.

Beyond these large transactions, most often involving a publicly traded company, smaller deals also are being struck and will be made public as 2018 continues. These transactions will mark the continuation of the previous year’s active M&A landscape.

In 2017, recyclers involved in the municipal market witnessed Phoenix-based Republic Services Inc. purchase one of the largest material recovery facility (MRF) operators, ReCommunity, which was based in Charlotte, North Carolina. Also in 2017, the nation’s largest glass recycler, Houston-based Strategic Materials Inc., changed hands from one equity fund owner to another.

In the United States, a sweeping new tax law almost certainly will prompt widespread evaluations by business owners regarding opportunities to buy or sell assets. Business owners who had been considering an exit strategy may well find new, favorable circumstances to expedite the sale of a business.

The recycling industry has experienced past waves of “consolidation” that, to a great extent, were prompted by institutional investors and equity funds identifying the sector as one they believed could benefit from being less fragmented.

If 2018 does indeed play out as a year with a substantial boost in M&A activity, such investor-driven motives likely will play a role, with the new tax law potentially providing an incentive for sellers to seek a match in the M&A marketplace. If willing parties are on both sides of the M&A equation, increased dealmaking almost certainly will follow.

Whether Recycling Today readers are potential buyers or sellers or are interested solely for competitive landscape reasons, it seems almost certain they will be reading about a steady stream of M&A activity in the year ahead.