Paladin plans to acquire additional companies and also grow organically in the months and years ahead. | Aquatarkus/Shutterstock
Formed by private equity and acquisitions of electronics processors in Florida and Minnesota, Paladin EnviroTech launched this week as the latest entrant in the ITAD space, with multiple industry veterans in leadership roles.
Private equity firm SER Capital Partners announced the new company on July 28, noting that its first two completed acquisitions are of Integrated Recycling Technologies (IRT) in Minnesota, and TechSmart International (TSI) in Florida. Both companies will operate under the Paladin brand.
Paladin’s leadership team includes ITAD industry veterans Brian Diesselhorst as CEO and Bill Vasquez as chief operating officer. Most recently, Diesselhorst was CEO of PedalPoint Recycling, and Vasquez was general manager for the Americas at SK tes.
The new ITAD entity marks SER’s first foray into the electronics recycling business, and the equity firm’s CEO, Rahul Advani, said in a statement that the industry “aligns perfectly with our investment framework.”
“Our mission at SER is to identify and support businesses that drive meaningful environmental impact while delivering strong financial returns,” Advani said.
In an interview, Diesselhorst and Vasquez described ambitious growth plans for Paladin, which will be involved in traditional corporate ITAD services, data center decommissioning, and e-scrap shredding for commodity recovery.
“Over the years, we’ve heard clients looking for that full, vertical one-stop solution, and I think the market is really looking for it,” Vasquez said.
Paladin closed on the IRT and TSI acquisitions within 90 days, Diesselhorst said, and the company is in additional due diligence with a company on the West Coast and another in Europe.
“We’re looking to acquire three to five more companies in the next 12 to 18 months,” he said. But the company has plans beyond growth through acquisitions, he added, and is looking at organic growth opportunities to build out new facilities.
With the IRT and TSI acquisitions, Paladin’s footprint is two facilities — both of which serve customers around the country – with an employee headcount of nearly 100. The TSI facility in Tampa will be moving into a larger space, Vasquez noted, which will more than double its capacity. All told, he estimated Paladin has a current capacity of a few million pounds per month for commodity recovery and between 10,000 and 20,000 assets per month for reuse, refurbishment and parts harvesting.
The company’s growth plans are more about growing its footprint around the country, to improve the logistics of servicing national and global clients, than about increasing capacity, Vasquez added.
Besides SER, Paladin is working closely with South Korean e-scrap processor Daeheung M&T, which is providing technical expertise, global supply chain connections and financial investment. Daeheung has operations in South Korea, China, Vietnam and Australia, Diesselhorst said, giving Paladin “a partner that we know and trust and is certified” in that region.
“I think that partner network that’s so strong in this industry is going to be critical to what we’re trying to do,” he said.
Paladin’s formation marks the latest example of both growing private equity interest in the electronics recycling space, and heightened merger and acquisition activity within the industry. Vasquez said the private equity (PE) sector sees the same trends that ITAD industry players are monitoring that point to greater demand for the industry’s services in the years to come.
ITAD companies are processing equipment that was deployed into the market five to seven years ago, he explained. In other words, the increase in devices deployed in the early days of the pandemic is now filtering into the end-of-life stream. Looking at current equipment deployments — particularly the computing needs connected to artificial intelligence — provides another indicator of future demand.
“I think the PE firms have figured out that that’s going to be huge, it’s going to be a large opportunity,” he said.
Additionally, for an ITAD company looking for ways to innovate, the backing of private equity can provide a boost.
“There’s going to be so much material coming out, and the solutions that we did five years ago are going to have to be different,” Vasquez said. “I’m excited about being with Paladin and SER, because I do really feel that we can innovate and actually go and create the new solutions needed for what’s going to happen, and not just do what we’ve always done.”