Atlas Organics founders Joseph McMillin (left) and Gary Nihart (right).

January 13, 2022 | Business+Finance, Composting, Facilities

$200 Million Deal To Expand Composting Infrastructure

Top: Atlas Organics founders Joseph McMillin (left) and Gary Nihart (right).

On January 12, 2022, Atlas Organics, a developer and operator of commercial composting infrastructure based in the Southeast U.S., announced it is expanding operations nationwide in partnership with Generate Capital, an owner and operator of organic waste processing solutions in North America. The transaction will provide over $200 million in financing for expansion of Atlas composting facilities in the coming years; Generate has taken ownership of Atlas’ assets, including existing municipal contracts, at the eight currently operated composting facilities.

Atlas Organics was founded by Joseph McMillin and Gary Nihart in Spartanburg, South Carolina (SC) in 2014. They became involved with food waste recycling while in college. Nihart was more focused on composting, whereas McMillin was involved in collection. A mutual friend introduced them and they decided to collaborate — starting with food waste collection while seeking a site to start a composting facility. The pair tried to get capital, but was rebuffed. Despite a lack of funds to develop its own facility, McMillin and Nilhart secured a contract with Greenville County Solid Waste to build and operate a composting site at its Twin Chimneys Landfill in Honea Path (SC). “We had a public-private partnership, but no money,” recalls Nihart. Eventually, VentureSouth, a syndicate of angel equity investors, provided Atlas seed funding at the end of 2015, in exchange for an undisclosed percentage of the company.

Twin Chimneys gave McMillin and Nihart experience with the public-private partnership model for composting infrastructure development, and they began to pursue more opportunities. Atlas Organics raised two more rounds of venture capital for the corporate entity from Closed Loop Ventures, Gratitude Railroad and other investment firms across the U.S., and executed a contract with the City of Durham (NC) to operate its yard trimmings and biosolids composting facilities.

In December 2019, Atlas Organics received $21.4 million in project development capital from Spring Lane Capital. “This investment gives us dedicated infrastructure capital to design, build, and operate composting facilities for public and private partners to provide much needed organics recycling infrastructure,” said McMillin in a BioCycle interview. “Our business model is to be a comprehensive organics recycling platform. The fact that we can finance these projects and have capital to do so is a big differentiator. For public-private partnerships (P3s), the municipality usually controls the material flow and Atlas underwrites the projects because we have feedstock guarantees. Many times, with P3s, the municipality has access to land or facilities that needs to be repurposed. That approach — using existing sites and infrastructure — makes the tipping fee we charge in our contracts reasonable for municipalities.”

Generate Capital will be entering the composting space with its investment in Atlas Organics. The company owns anaerobic digestion facilities that process over 250,000 tons/year of food waste, and yield renewable natural gas, clean electricity and fertilizer. “We see a tremendous opportunity to leverage the experience and capabilities of the Atlas team to build a significant platform for composting infrastructure development,” notes Bill Caesar, president of Generate’s waste-to-value operations.

Adds McMillin, “We’ve built a solid platform for growth and a partner like Generate will help open the door to new opportunities and deliver on our nationwide expansion. We can focus on building and acquiring composting operations, developing our people, and delivering value to our customers knowing that we have the backing of a well-resourced and experienced team to support us.”

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