GFL Environmental has signed a definitive agreement to acquire WCA Waste, a provider of solid waste processing services.
Under the terms of the deal, the company will pick up the business from Macquarie Infrastructure Partners II for USD 1.21 billion.
GFL will finance the purchase using the proceeds of a USD 600.00 million private placing of stock to HPS Investment Partners, which is expected to close at the same time as the acquisition; the remainder will be funded using cash on hand and the buyer’s revolving credit facility.
The buyer said the deal will support its ongoing organic growth while expanding its US footprint and enabling significant cost savings and an increase in free cash flow.
It is also expected to create long term value for shareholders and provide a complementary asset network.
Following completion, which is expected to occur in the fourth quarter of this year, GFL will have operations spanning nine Canadian provinces and 27 US states.
Closing of the deal remains subject to approval from the US Department of Justice, among other customary conditions.
GFL has also unveiled its outlook for 2020, saying it estimates revenue of between USD 4.04 billion and USD 4.08 billion for the year, while earnings before interest, taxes, depreciation and amortisation are expected to total USD 1.04 billion to USD 1.06 billion.
WCA operates a network of solid waste assets, including 37 collection and hauling operations, 27 transfer stations, three material recovery facilities and 22 landfills.
It also has more than 1,000 collection vehicles across 11 US states and generates annual revenue of around USD 400.00 million.
The firm was publicly traded until being taken over by Macquarie Infrastructure Partners in March 2012; the US fund manager paid USD 526.00 million to acquire the company, delisting it from Nasdaq in the process.
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