Colorado Springs News, Sports & Business

Springs company seeks to be big player in medical waste arena

WAYNE HEILMAN Updated: November 21, 2012 at 12:00 am

Dominick DiVello and his partners have big plans for Healthcare Medical Waste Services, a Colorado Springs-based company he started in June as a holding company for medical waste disposal companies across the nation that he eventually plans to acquire.

DiVello said he spent more than two years researching the medical waste industry before forming the company and recruiting investors The O’Neil Group, a local holding company for Braxton Technologies and several real estate investments, and Susan Loo Pattee, whose grandparents started local mail-order greeting card giant Current Inc. Shortly after it was formed, the company bought Front Range Medical Waste in Castle Rock, moved it to Colorado Springs and changed its name to Healthcare Medical Waste Services.

“When I researched the industry, I found what seemed like a void in the industry. The industry is dominated by one major player, Stericycle, and the rest are pretty much mom-and-pop local businesses,” DiVello said. “Our strategy is to undercut the prices of the competition by 30 percent, which has allowed us to add 100 to 150 customers since acquiring Front Range in June. Our long-term strategy is to buy up some of these family-owned companies. We believe it has the potential to be a $1 billion business.”

Healthcare Medical Waste Services is able to keep its overhead costs low by sharing administrative and other services with The O’Neil Group, allowing the company to “compete regionally, then nationally for large institutional customers,” said Kevin O’Neil, chairman of The O’Neil Group.

DiVello said he plans to begin making other acquisitions within six months and eventually expand into offering to haul pharmaceutical and chemotherapy waste, which must be incinerated out of state, as well as medical record shredding services, all of which would be done by contracting out those services. The company also is in negotiations to form a partnership with a larger firm DiVello declined to name that would handle donations of used medical equipment and unused supplies to clinics and other medical facilities in third-world countries.

Healthcare Medical Waste Services, which has five employees, picks up medical waste from physician, dental and veterinary offices, as well as tattoo parlors, along the Front Range, and also offers its clients online or in-office training on compliance with federal regulations on medical waste and records, DiVello said. The waste is hauled to a facility in the Denver area where it is loaded into autoclave machinery that sterilizes the waste for 50 minutes through high-pressure steam heated to 245 degrees; the waste is then sent to a traditional landfill, he said.

DiVello is no stranger to the waste business. He and brother Victor DiVello owned U.S. Waste Industries in southern Colorado and sold the company, which operated waste collection, recycling, transfer stations and landfills in Cañon City, Colorado Springs, Fountain, Pueblo and Trinidad, to Waste Connections in 2007. The price of the deal was not disclosed, but the deal was amid eight Waste Connections completed for $84.9 million during the first nine months of 2007, according to the company’s third-quarter 2007 report to shareholders.

DiVello had been an investor with The O’Neil Group in some of its real-estate deals and Braxton Technologies, a local military contracting firm. He said the investors decided to buy existing companies rather than launch companies in individual markets because of the extensive state and federal permits required in the medical waste industry.

Contact Wayne Heilman: 636-0234 Twitter @wayneheilman

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