Deal expected to be structured with roughly 20% cash and 80% stock, valuing Secure Waste at around 11 times its earnings before interest, taxes, depreciation, and amortization
GFL Environmental Inc. is reportedly closing in on a deal to acquire Canada’s Secure Waste Infrastructure Corp. for more than $6 billion including debt, according to a person familiar with the matter.
Secure Waste’s shares have surged about 70% over the past year to finish at $21.36 in Toronto on Friday
The proposed price is around $24.50 per share, which would represent a premium of approximately 15% to last week’s closing level. Secure’s shares have been trending upwards due to growing demand for waste management services and increasing focus on environmental sustainability.
GFL has been actively pursuing growth through acquisitions, tripling its market capitalization to $21 billion over the past six years
Under the leadership of CEO Patrick Dovigi, GFL has strategically expanded its operations through targeted acquisitions. This deal would mark one of the company’s largest recent transactions, further solidifying its position in the waste management industry.
GFL executives view Secure Waste assets as complementary to its existing business
The acquired assets include waste management businesses and energy infrastructure, which are seen as synergistic with GFL’s existing operations. The combined company would have significant opportunities for cost savings and cross-selling of services, driving long-term growth.
Secure Waste gets about three-quarters of its adjusted EBITDA from its waste management business
The remaining quarter comes from energy infrastructure, including oil pipelines and storage. This diversification has contributed to Secure Waste’s strong financial performance in recent years.
If approved, Secure shareholders would own approximately 15% of the merged company
The proposed deal would involve GFL issuing roughly 80% stock and 20% cash to Secure shareholders. The combined entity would have a strong presence in western Canada and industrial waste services, positioning it for future growth.
GFL has made several acquisitions in recent years, including the purchase of Frontier Waste Solutions
In August 2022, GFL acquired Frontier Waste Solutions, which operates dozens of sites across Texas. The financial details of this deal were not publicly disclosed, but industry insiders have estimated its value at around $900 million.
Despite challenges, GFL has continued to expand its operations and invest in growth initiatives
In recent years, GFL has faced challenges related to environmental concerns and regulatory issues. However, the company has demonstrated resilience and adaptability, continuing to invest in growth strategies and diversify its services.
GFL’s commitment to sustainability has driven its growth and reputation as a leading waste management provider
GFL’s focus on environmental sustainability has resonated with customers and investors alike. The company’s commitment to reducing waste and promoting recycling has earned it recognition as a leader in the industry, further solidifying its position for future growth.
Conclusion: The proposed deal would mark a significant milestone for GFL and Secure Waste
The combination of GFL’s strong financial performance and Secure Waste’s complementary assets would create a powerful force in the waste management industry. As the deal moves forward, investors will be closely watching developments to gauge its impact on both companies’ future prospects.