GFL Environmental Inc., a leading North American diversified environmental services company, announced that it has entered into a definitive agreement with an affiliate of Macquarie Infrastructure Partners II to purchase WCA Waste Corporation and its subsidiaries (“WCA”) for an aggregate purchase price of US$1.212 billion. The purchase price for the Acquisition will be financed in part with the net proceeds of a private placement of US$600 million of equity and the balance through a combination of cash on hand and capacity under the Company’s revolving credit facility.
WCA operates a vertically-integrated network of solid waste assets, including 37 collection and hauling operations, 27 transfer stations, 3 material recovery facilities and 22 landfills supported by over 1,000 collection vehicles, across 11 U.S. states.
WCA has an established regional platform with a growing footprint across the Midwest and Southeast U.S., including three key markets in Texas, Missouri and Florida and generates annualized revenue of approximately US$400 million.
The Acquisition is expected to support GFL’s continued organic growth by further extending its reach into new and adjacent markets and forming a base to pursue synergistic tuck-in acquisitions. GFL expects that the Acquisition will expand its U.S. footprint while creating an opportunity to realize meaningful synergies and free cash flow accretion.
Following completion of the acquisition of WCA and the divestiture assets from Waste Management and ADS, GFL will operate in nine provinces in Canada and in 27 states in the United States. “We continue to deliver on our goal of pursuing strategic and accretive acquisitions to grow our business. The WCA transaction, which we have been working on for over a year, is another example of this commitment. The high quality, vertically integrated network of assets, together with our recently announced acquisition of certain divestiture assets resulting from the Waste Management and ADS transaction, will complement our existing footprint and provide us with the runway to further expand in the U.S. through tuck-in acquisitions and providing our suite of environmental services solutions to new customers. We are excited to welcome almost 1,600 employees of WCA to the GFL family,” said Patrick Dovigi, the Founder and Chief Executive Officer of GFL. “To fund part of the transaction, we will be issuing new equity to HPS Investment Partners, LLC, a long standing partner of GFL, at a premium to market. Their continued support is a testament to their belief in the value proposition of GFL. The new equity will help us maintain our leverage within expected levels.”
Mr. Dovigi added, “Our multi-disciplinary integration team has a successful track record of integrating acquisitions like WCA and the Waste Management/ADS divestiture assets. We have been working on integration preparation of the divestiture assets since earlier this year which has allowed us to significantly advance our integration plans. We are well-positioned to bring these operations and WCA on board.”
Scot French, Co-Governing Partner of HPS, said, “Today’s announcement represents a key component of GFL’s acquisition plan which will help further position the Company for continued long-term success. We look forward to building on our now seven-year partnership with Patrick and his entire team as they continue to execute their growth strategy.”