GFL Environmental Inc. has announced a significant acquisition, agreeing to purchase SECURE Waste Infrastructure Corp. for $24.75 per SECURE common share, which brings the total enterprise value of the transaction to approximately $6.4 billion. This acquisition is poised to enhance GFL’s operational footprint in Western Canada, a region where SECURE operates over 80 locations, including 12 landfills and 55 waste treatment facilities.
The deal is structured to be financed through 80% GFL subordinate voting shares and 20% cash, reflecting GFL’s strategy to leverage its equity in the transaction. The acquisition is expected to bolster GFL’s Adjusted Free Cash Flow per share by an estimated 12% to 15%, while also increasing its Adjusted EBITDA margin to 31.6%. This financial uplift is anticipated to provide GFL with a stronger position in the competitive waste management sector.
Both companies’ Boards of Directors have unanimously approved the transaction, indicating strong confidence in the strategic benefits of the merger. The SECURE Board established a special committee to review the transaction, ensuring that the interests of SECURE shareholders are adequately represented. This level of oversight underscores the significance of the acquisition in the context of the broader environmental services market.
Patrick Dovigi, Founder and CEO of GFL, emphasized the strategic importance of this 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 statement highlights GFL’s intent to enhance its service offerings and operational efficiency through the integration of SECURE’s assets.
Mick Dilger, Chairman of the Board of Directors of SECURE, expressed confidence in the merger, noting, “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.” This sentiment reflects a positive outlook for SECURE shareholders as they transition into the new corporate structure.
Allen Gransch, President and CEO of SECURE, added, “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.” This integration is expected to create a more robust operational framework, allowing GFL to expand its market reach and service capabilities.
As GFL prepares to integrate SECURE into its operations, the company looks forward to welcoming the over 2,000 SECURE employees to the GFL family, as stated by Dovigi. This move not only signifies growth for GFL but also represents a consolidation of expertise and resources in the environmental services sector.
While the acquisition has been approved, details regarding the finalization of the transaction and its impact on the market remain to be seen. The termination fee associated with the Arrangement Agreement is set at $200 million CAD, with an additional $20 million CAD expense reimbursement fee if the agreement is terminated. These financial stipulations highlight the seriousness of the commitment both parties are making in this significant merger.
