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August 3, 2023

Clairvest Realizes 12.3x on Its Investment in Arrowhead Environmental Partners

Toronto, Ontario (August 3, 2023) – Clairvest Group Inc. (TSX: CVG) (“CVG”), today announced that it, a partnership managed by it, Clairvest Equity Partners VI (“CEP VI”, collectively “Clairvest”) and the equity holders of Arrowhead Environmental Partners (“Arrowhead” or the “Company”) have sold their interests in Arrowhead to Waste Connections, Inc.

Arrowhead is a non-hazardous solid waste management company that provides waste-by-rail disposal services to several major U.S. markets. The Company owns and leases unique and well-placed disposal infrastructure assets to provide cost-effective waste-by-rail disposal solutions to solid waste management companies in markets with tightening disposal capacity.

In June 2020, Clairvest invested in Arrowhead and partnered with three experienced waste management executives – William Gay, James Francesco and Robert Berns – to help grow and build the Company into a unique and valuable enterprise providing a compelling solution for disposal-constrained markets. Over the three-year investment period, the Company invested heavily in its transportation and disposal infrastructure, grew revenue by approximately 15x, and became a strategically significant waste management industry player.

Upon closing, CVG’s portion of sale proceeds was approximately US$36 million. On a constant currency basis, the sale proceeds for CVG represent a multiple of capital invested of 12.3x and an IRR of 128%.

“In 2020, we made a strategic and well-reasoned decision to invest in an earlier staged company and it played out well. The outstanding result is primarily due to our management partners who leveraged their significant industry and waste-by-rail experience to execute the Company’s strategy we all agreed on three years ago. We are thrilled to have been a part of Arrowhead’s success and look forward to seeing the continued growth trajectory of the business,” said Michael Castellarin, Managing Director at Clairvest.

“One of the reasons we chose to partner with Clairvest in 2020 was their positive track record of success backing owner-operators in the environmental services industry. Our vision was to capitalize on the macro trends of declining disposal capacity and rising transportation and disposal costs in the Northeast and create a novel disposal solution for customers in the region, which we have successfully accomplished. The Clairvest team provided active support to our management team and was a valuable sounding board when evaluating strategic decisions. We sincerely appreciate their support over the past few years,” said William Gay, Co-Founder & CEO of Arrowhead.

“As an entrepreneur for most of my career, my experience told me it was vital to be extremely confident in and comfortable with the people we chose to partner with, not just the private equity firm itself. The team at Clairvest always acted with integrity and did what they said they would do. They earned my respect early on and I trust and truly appreciate them as partners,” added James Francesco, Co-Founder & COO of Arrowhead.

Vedder Price acted as legal advisor to Arrowhead.