- Fortress Investment Group, Ares Management Corp., and Blackstone could lose a combined $1.4B after their investment in United Site Services (USS) collapsed.
- The trio backed a 2021 Platinum Equity deal valuing the portable toilet company at $4B. However, the business struggled post-pandemic due to slower construction activity and rising interest rates.
- Control of USS may soon be turned over to lenders. A final decision is expected as a forbearance agreement nears expiration in early December.
Big Flush: A $1.4B Mistake
Three major Wall Street investors — Fortress, Ares, and Blackstone — are preparing to take a full loss on their stake in United Site Services. Per Bisnow, the portable toilet company, once valued at $4B, is now in trouble. The deal was led by Platinum Equity, which may soon hand the company over to its lenders.
How It Went Down
In 2021, Platinum sold USS from one of its own funds into a new investment vehicle. Fortress, Ares, and Blackstone backed the move, putting their capital into the newly formed structure. As a result, Platinum’s earlier investors walked away with $2.6B, while the new fund held USS as its sole asset.
Initially, the bet seemed promising. Investors expected a post-COVID boom in events and construction to drive demand for portable toilets. However, that demand never fully materialized. At the same time, higher interest rates drove up debt costs, putting further pressure on the business.
Now What
Platinum hasn’t officially turned USS over to its lenders yet. However, according to Bloomberg, it has a forbearance agreement in place that expires in early December. Once that deadline passes, lenders could take control unless a new deal is reached.
Back in 2021, Platinum Partner Louis Samson described the transaction as offering “the best of both worlds.” He claimed it gave investors a chance to cash out while allowing new backers to benefit from future growth. Now, that growth has failed to materialize.
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The Broader Context
USS remains a key player in the US portable toilet industry. The company serves over 9,000 construction clients across 30 states and operates on more than 49,000 sites. Despite this scale, it has struggled under the weight of its debt.
Moreover, the broader portable toilet market is expected to grow. A report by Grand View Research estimated the market’s value at $20.7B in 2023. By 2030, it could reach $34.9B. Still, the industry remains highly competitive, and financial pressure is mounting for leveraged operators.
Why It Matters
This deal underscores the growing risks tied to high-leverage private equity investments. As interest rates stay high, businesses that depend on construction or events are feeling the strain. Moreover, financial pressure is also surfacing in other sectors as debt-heavy strategies face refinancing challenges, further signaling cracks across the broader investment landscape. The USS situation raises questions about single-asset fund strategies and whether they can survive in today’s market.
What’s Next
If USS passes to lenders, it may signal broader trouble ahead for private equity firms. Similar bets in niche service sectors could also come under stress. Moving forward, investors may push for better risk controls and more diversified fund structures — especially in an uncertain rate environment.
