In a significant move for the environmental services sector, GFL Environmental Inc. has agreed to acquire SECURE Waste Infrastructure Corp. for $24.75 per SECURE common share, marking a total enterprise value of approximately $6.4 billion. This acquisition is poised to enhance GFL’s operational capabilities and financial performance, making a notable impact on the waste management landscape in Canada.
The decision to acquire SECURE is driven by GFL’s strategy to expand its footprint in Western Canada, where SECURE operates over 80 locations, including 12 landfills and 55 waste treatment facilities. Patrick Dovigi, Founder and CEO of GFL, expressed enthusiasm about the acquisition, stating, “The acquisition of SECURE will provide us with a highly complementary network of permitted waste processing and disposal assets that will densify our footprint in Western Canada.” This expansion is expected to increase GFL’s Adjusted Free Cash Flow per share by 12% to 15% and elevate its Adjusted EBITDA margin to 31.6%.
The financial structure of the transaction is notable, with 80% of the payment being made through GFL subordinate voting shares and the remaining 20% in cash. This approach not only reflects GFL’s confidence in its growth trajectory but also aligns the interests of SECURE shareholders with the future success of the combined entity. Mick Dilger, Chairman of the Board of Directors of SECURE, remarked, “We have long respected how Patrick and his team have grown GFL over the years and believe that the 16% ownership interest that SECURE common shareholders will retain in the combined company will provide shareholders with meaningful upside as GFL continues to execute on its growth strategy.”
The acquisition has received unanimous approval from the Board of Directors of both companies, underscoring the strategic alignment and mutual benefits anticipated from this partnership. Additionally, SECURE’s Board established a special committee to thoroughly review the transaction, ensuring that all aspects were carefully considered before moving forward.
As GFL Environmental continues to solidify its position as the fourth largest diversified environmental services company in North America, this acquisition represents a pivotal moment in its growth strategy. The combination of SECURE’s hard-to-replicate infrastructure network with GFL’s broader platform is expected to strengthen GFL’s ability to capture more waste streams across the value chain. Allen Gransch, President and CEO of SECURE, noted, “The transaction will combine SECURE’s hard to replicate infrastructure network with GFL’s broader platform, strengthening GFL’s ability to capture more waste streams across the value chain.”
Looking ahead, GFL is set to welcome over 2,000 SECURE employees into its family, which not only expands its workforce but also enhances its operational capabilities. As the integration process unfolds, the focus will be on leveraging the strengths of both companies to deliver improved services to clients and communities across Canada.
While the acquisition is a significant step forward for GFL Environmental, uncertainties remain regarding the full implications of this merger on the market and the communities served. Details remain unconfirmed as the companies work through the integration process and assess the broader impact of this strategic move.
