M&A

GFL announces acquisition of Terrapure Environmental

GFL Environmental Inc., Ontario, announced March 15 that it has entered into a definitive agreement to acquire the solid waste and environmental solutions business of Terrapure Environmental Ltd. and its subsidiaries (collectively, "Terrapure") for an aggregate purchase price of $743.8 million. The acquisition will exclude Terrapure’s battery recycling business.

Terrapure is an Ontario-based integrated provider of solid and liquid waste management and industrial services to more than 7,000 customers across Canada. Terrapure's environmental and organics solutions cover a diverse range of waste streams from generation through collection, processing, recovery, recycling, reuse and disposal. These services are managed through the company’s integrated network of assets including its landfill and its liquid and solid waste collection and processing facilities. Terrapure's operations are supported by a fleet of more than 500 collection vehicles and approximately 1,600 employees.

Terrapure's operations to be acquired in the acquisition generated revenue of approximately $292.7 million in 2020, inclusive of COVID-related volume impacts.

According to GFL, the acquisition advances the company’s growth strategy and aligns with the company's goal of growing free cash flow.

GFL laid out three ways the acquisition will benefit the company:

It will enhance GFL’s capabilities and reach: According to the company, the acquisition brings a high-quality, complementary asset network and customer base to GFL's existing operations and augments GFL's existing service offerings in several regional markets, including Atlantic Canada. As part of the acquisition, GFL will acquire the Stoney Creek landfill, an industrial landfill strategically located in the greater Toronto area which recently received expansion approval for 14-plus years.

It will create significant synergies: According to the company, the acquisition creates an opportunity for GFL to realize meaningful synergies and earnings accretion. The company expects the acquisition to generate at least $36.1 million of adjusted free cash flow and at least $10 million in annual cost synergies through operational opportunities from geographical and functional overlap between the existing operations of Terrapure and GFL.

It will create long-term shareholder value: According to the company, the acquisition reinforces GFL's goal of creating long-term equity value for shareholders. Terrapure's strategically located network of assets coupled with its strong operating margins are expected to be immediately accretive to free cash flow and provide opportunities for the company to continue to pursue its growth strategy.

"The acquisition of Terrapure is another example of GFL delivering on our commitment to pursue strategic and accretive acquisitions to continue growing our business," GFL founder and CEO Patrick Dovigi says. "Terrapure's assets are highly complementary to our existing solid and liquid waste footprint in Canada. All of their service offerings are currently provided by GFL, resulting in expected integration and cross-selling opportunities, as well as the expansion of our operations into new regions."

Dovigi continues, "The timing of this acquisition, which we expect to close in the third or fourth quarter of this year, fits perfectly with our current schedule for completing the integration of our late 2020 acquisitions in the second quarter of 2021, ahead of our previous expectations. … We are excited about the opportunities that lie ahead with this acquisition and look forward to welcoming the almost 1,600 employees of Terrapure to the GFL family later this year."

The acquisition is subject to certain customary closing conditions, including clearance under Canada’s Competition Act. The acquisition is not subject to any financing conditions. GFL says it is well-positioned to fund the acquisition. The company says it currently anticipates funding the acquisition using a combination of capacity under its revolving credit facility, cash on hand and incremental financing, but will evaluate opportunistic financing opportunities as they present themselves.

American AllWaste acquires L&G Environmental

American AllWaste LLC, Houston, announced on March 8 that it has acquired Brenham, Texas-based L&G Environmental LLC, a nonhazardous liquid waste processing facility.

American AllWaste specializes in nonhazardous liquid waste transportation and disposal, sewer infrastructure cleaning and inspection, renewables, composting, brown grease recovery and on-site dewatering services for customers in the municipal, commercial and industrial sectors.

“AllWaste continues to aggressively build the premier nonhazardous liquid waste business in the southern United States,” Kevin Charlton, co-chairman of AllWaste holding company NewHold Enterprises, says. “We’re very pleased to welcome L&G to the AllWaste family.”

According to the company, the L&G facility will primarily help service existing AllWaste operations in both the Houston and central Texas markets, processing liquid waste that will ultimately be sent to the company’s composting operations for beneficial reuse.

Philip McCammon Jr., a member of AllWaste’s management team, says the L&G location will also open the door to new markets for AllWaste.

“The L&G facility location and capacity, coupled with AllWaste’s amazing support and resources, will allow us to be very competitive in that region and utilize the facility to its fullest,” McCammon says.

The L&G acquisition marks AllWaste’s sixth since May 2018.

“I’m proud of how quickly AllWaste has been able to acquire and onboard so many strategic facilities,” American AllWaste CEO Darrell Rogers says. “It’s a testament to our great people, who have even managed to excel in the face of a global pandemic.”

Circon Environmental acquires Bealine

Circon Environmental, a portfolio company of New York City-based Kinderhook Industries LLC, announced March 11 that it has acquired Bealine Environmental Services Inc. Bealine represents the third add-on acquisition for Circon and Kinderhook’s 53rd environmental services transaction. Financial terms of the transaction were not disclosed.

Headquartered in La Porte, Texas, Circon Environmental is an industrial liquids management business servicing both hazardous and nonhazardous liquid waste generators. It is also a provider of hazardous waste removal, transportation and disposal solutions. The company specializes in procuring, blending, treating and processing petroleum, petrochemical products and waste streams within the Gulf Coast and Chicago regions. Circon has eight strategic facilities including four centralized waste treatment (CWT) facilities, two RCRA Part B facilities, and two diversified co-products processing facilities with centrifuge separation processing and atmospheric and vacuum distillation as well as storage along the Houston Ship Channel. Circon’s facilities are barge-, rail- and truck-ready for onloading and offloading.

Headquartered in Pasadena, Texas, Bealine owns and operates a non-hazardous CWT facility servicing the broader Houston market. Bealine’s founder Jack Beal started the company in 2007 for the treatment of non-hazardous wastewater.

“We are excited to add Bealine and its capabilities into our suite of CWT solutions,” Circon CEO Frank Iezzi says. “The Bealine acquisition will further expand Circon’s capacity and footprint within the Houston market, and will ensure that our industrial clients have access to continuous treatment of their contaminated water. Additionally, the Bealine transaction is a further example of Circon’s commitment to servicing its customers using sustainable methods and solutions.”

“The Bealine team is excited to join the Circon family,” Beal says. “Circon’s deep industry knowledge of our local market and access to additional resources will benefit our existing operation tremendously. Our customer base will continue to receive the same high-quality service and benefit from Circon’s commitment to providing its services with an eye towards sustainability.”

Several Bealine employees will join the Circon team. In connection with the transaction, Circon also acquired the real estate on which Bealine currently operates.

Rob Michalik, managing director of Kinderhook, states, “The acquisition of Bealine will enable Circon to win market share and expand its CWT presence, which has been a strategic focus for the company. We look forward to welcoming the Bealine team and its longstanding reputation of quality service to Circon and look forward to using this transaction as a catalyst for future growth.”

Kirkland & Ellis, Chicago, served as legal counsel to Kinderhook and Circon. Doherty & Doherty LLP, Houston, served as legal counsel to Bealine.