GFL trucks at the Solid Waste Transfer Station in Toronto on Aug. 18, 2020.Melissa Tait/The Globe and Mail
GFL Environmental Inc. is set to acquire Terrapure Environmental Ltd. for $927-million, in a deal that will see the Canadian-based waste management giant further expand its customer base across the country and cement its position as one of the biggest waste management providers in North America.
Based in Burlington, Ont., Terrapure is a waste management company that owns more than 500 collection vehicles and employs approximately 1,600 workers, generating revenue of $365-million in 2020. The acquisition will see GFL acquiring all of Terrapure’s assets except its battery-recycling business.
“Terrapure’s assets are highly complementary to our existing solid and liquid waste footprint in Canada,” said Patrick Dovigi, founder and chief executive of GFL, in a statement released Monday evening. Mr. Dovigi added that GFL provides all of the same services as Terrapure, which creates cross-selling opportunities and potential to expand into new regions, particularly Atlantic Canada.
The acquisition will see GFL acquire the Stoney Creek landfill near Hamilton, an industrial landfill that recently received expansion approval for the next 14 years.
The North American waste management industry has been highly fragmented, and GFL has sought to consolidate the market through a series of recent acquisitions. In October, 2020, the company spent US$835-million acquiring dozens of landfills, collection operations and collection vehicles across 10 U.S. states through the purchase of Advanced Disposal Services Inc. and Waste Management Inc.
Although GFL generated $4.1-billion in revenue for the 12 months ending December 31, 2020, it has just $27-million in cash, and its balance sheet is heavily laden with debt.
The company said in its release that the Terrapure acquisition will generate $45-million in adjusted annual net income.
GFL’s stock has risen by approximately 60 per cent since last October, giving the company a market value of roughly $13-billion.
The acquisition is subject to regulatory approval by Canada’s competition bureau, and is expected to close in the third or fourth quarter of 2021.
With a report from Tim Kiladze
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Vanmala Subramaniam