Research from business adviser Grant Thornton UK has found record merger and acquisitions activity in the waste sector in 2017, with the highest number of deals recorded since 2010.
But the company warned that the sector could be at risk if it failed to plan properly for Brexit.
It said there had been 50 transactions, with activity peaking in the final quarter of last year.
The recycling and waste management sectors recorded the highest level of investment, making up 43% and 25% of deals, respectively. Paper and metal recycling contributed most to this activity, making up 26% of recycling deals.
There was also increased interest from overseas investors in buying UK waste businesses, involving in nine of the 50 deals.
Private equity was involved in only the largest deals, accounting for 10% of all activity, with investor Apax Partners’ acquisition of hazardous waste company Safety-Kleen Europe the largest at £640m.
Mike Read, head of energy and environment at Grant Thornton, said: “While deal activity remained relatively stable in most waste sub-sectors in 2017, recycling saw a stark increase.
“The ongoing uncertainty surrounding Brexit is creating a challenging environment for the waste management sector. While deal levels have increased, it has also resulted in a drop in confidence for some.
“The number of potential outcomes from the negotiations also means that many companies have felt unable to confidently commit to making strategic plans.”
Read said waste businesses had been reluctant to plan for Brexit but “companies need to be properly prepared in case of a challenging Brexit outcome and they need to start planning ahead now”.