GFL Environmental Inc has agreed to acquire Matrec Services Inc, a solid waste business owned by Canadian trucking and logistics provider TransForce Inc (TSX: TFI). The deal, expected to close in early 2016, is priced at $800 million and will be funded in part by the issue of GFL shares to TransForce. Vaughan, Ontario-based GFL said the acquisition will make it one of the largest independent waste management companies in Canada and will facilitate its entry into Québec and Eastern Ontario. Backed by Hawthorn Equity Partners and Highbridge Principal Strategies, the company bought a group of Ontario-focused excavation and demolition businesses in July.
GFL to Acquire TransForce Inc.’s Solid Waste Division
TORONTO, Oct. 29, 2015 /CNW/ – GFL Environmental Inc. (“GFL”) announced today that it has entered into a definitive agreement with TransForce Inc. (“TransForce”) (TSX: TFI) to buy its Matrec solid waste division for CAD$800 million. The acquisition will make GFL one of the largest independent waste management companies in Canada and facilitate GFL’s entry into the Quebec market and Eastern Ontario.
The transaction is subject to certain regulatory approvals and contractual consents. GFL and TransForce will work together to obtain the required approvals and expect to close the transaction by February 1, 2016.
“This transaction solidifies GFL’s position as a leader in the Canadian environmental services industry by expanding our solid waste operations into Eastern Ontario and Quebec.” said Patrick Dovigi, GFL’s Founder and Chief Executive Officer. “Like other platform acquisitions we have successfully completed in the past, the Matrec acquisition will form a strong foundation for GFL to continue our growth strategy through a combination of organic and acquisition growth. The addition of Matrec’s significant landfill, transfer station and recycling center operations, including the Lafleche landfill in Eastern Ontario in close proximity to the Ottawa market, will provide GFL with new opportunities to internalize existing waste streams. We expect the Matrec division to generate approximately $82 million of EBITDA in 2016, pre-synergies. Matrec is led by an experienced management team including Dave Richmond who has over 25 years of industry experience and I am thrilled to have Dave and the employees of Matrec join the GFL team.” added Mr. Dovigi.
GFL intends to fund the balance of the purchase price through a combination of new equity from a combination of new and existing equity holders, term bank debt, and the issuance of high yield notes. As part of the new equity, $100 million is expected to be satisfied by the issuance to TransForce of shares of GFL, subject to certain closing conditions. With its investment, Alain Bédard, President and CEO of TransForce, will be joining the GFL board of directors. GFL anticipates that funding of the acquisition will result in pro forma leverage consistent with its current level.
About GFL Environmental Inc.
GFL, headquartered in Toronto, ON, is a diversified environmental services company providing a comprehensive line of solid waste, soil remediation, and liquid waste services through its national platform. GFL currently serves over 29,000 commercial and industrial customers and approximately 1.2 million households under municipal solid waste contracts. With the addition of Matrec, GFL will have a workforce of over 2,700 employees, and will have operations in all Canadian provinces other than Prince Edward Island and will serve approximately 43,000 commercial and industrial customers and more than 1,700,000 million households.
Forward Looking Information
Certain information included in this Press Release is forward-looking, within the meaning of applicable Canadian securities laws. Much of this information can be identified by looking for words such as “believe”, “expects”, “expected”, “will”, “intends”, “projects”, “anticipates”, “estimates”, “continues” or similar words. Forward-looking information in this Press Release includes but is not limited to, statements concerning the completion of GFL’s acquisition of the Matrec division from TransForce and the related financing thereof. GFL believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.
Forward-looking information is not a guarantee of future performance and involves a number of assumptions, risks and uncertainties. Such forward-looking information necessarily involves known and unknown risks and uncertainties, which may cause GFL’s actual results to differ materially from any projections of future results expressed or implied by such forward-looking information. These assumptions, risks and uncertainties include but are not limited to the ability to satisfy the conditions of the acquisition of the Matrec division, or if satisfied, the final terms thereof (including, without limitation, risks related to obtaining satisfactory financing for the acquisition, the terms thereof and the impact on GFL’s leverage). Any forward-looking information is made as of the date hereof and, except as required by law, GFL does not undertake any obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.
For further information: Patrick Dovigi, President and Chief Executive Officer, +1 416 673 9385, firstname.lastname@example.org
Photo courtesy of Matrec Services Inc