GFL Environmental has sold its hauling assets in Nashville, Tennessee, to WM as part of a broader divestiture plan to tighten the company’s portfolio after multiple years of rapid growth.
The two companies notified customers of the deal on their respective websites this week, noting that it closed Monday. “The addition of GFL-Nashville will enable WM to improve routing efficiencies while servicing the combined residential, commercial and industrial routes throughout Middle Tennessee,” said WM.
The transaction is a small part of a much larger divestiture plan, which GFL estimates could yield proceeds of $1.6 billion (Canadian) upon completion. Last week, Casella Waste Systems announced it would be acquiring assets from GFL in Delaware, Maryland and Pennsylvania for $525 million. The other divestiture package, centered around GFL’s Colorado assets, is going to an unspecified buyer.
GFL acquired the Nashville hauling assets with the $2.8 billion purchase of Waste Industries in 2018, which was a sizable expansion of its footprint at the time.
CEO Patrick Dovigi, speaking at WasteExpo’s investor summit on Monday, described Nashville as a market where the company was “disposal disadvantaged” because WM and Waste Connections have a large share of post-collection infrastructure. GFL already had a long-term disposal agreement with WM in that market, and Dovigi said “it just wasn't a market where we were going to spend a lot of time to grow.”
During last week’s Q1 earnings call, GFL executives said the divestiture plan is intended to help bring down the company’s debt leverage by exiting markets where its expansion opportunities are constrained. The other two pending transactions are expected to close later this year. While GFL is more focused on tuck-in deals this year, the company anticipates ramping up its M&A spending again in 2024 and beyond.
Correction: We have updated this story to disclose that WasteExpo and Waste Dive's publisher, Industry Dive, are both part of Informa. Informa has no influence over Waste Dive's coverage.