GFL Environmental and Republic Services announced their deal for a collection of assets in Colorado and New Mexico closed on June 1. The sale of recycling, collection and disposal assets assisted GFL in reducing its debt leverage while reinforcing Republic's presence in those states.
GFL CEO Patrick Dovigi said in a statement on Monday his firm expects to reduce net leverage below 4x by the end of the year, "positioning us well for future upgrades to our credit ratings as well as sustainable industry leading free cash flow per share growth over the medium term."
Waste Dive reported the pending sale in May. The assets included in the deal came from GFL’s prior acquisitions of Waste Industries, WCA Waste and other local haulers located in Denver, Colorado Springs, Durango and Cañon City in Colorado, as well as in Bloomfield, New Mexico.
Republic area president Ryan Lawler said its acquisition of the GFL assets “reinforces our commitment to our Colorado and New Mexico communities” in a separate statement Monday.
The deal brings GFL's divestiture campaign closer to an end after the firm closed the sale of its Nashville, Tennessee, assets to WM in May. The company also announced its sale of $525 million worth of mid-Atlantic assets to Casella Waste Systems has been cleared by the U.S. Department of Justice and is expected to close on June 30.
Dovigi has previously described the divestiture campaign as a way to exit areas where GFL ranked third or lower in market share and "didn't see a path" forward for growth. Previously, GFL had said it would close the deals by Q3, but Dovigi said they're now "ahead of plan."
The collective package constitutes up to $450 million (Canadian) in annualized revenue, according to GFL. The divestitures would result in a $25 million revenue decline and $3 million adjusted free cash flow decline in GFL’s second quarter.
“These divestitures complete our portfolio rationalization plan," Dovigi said in Monday's statement. "We believe our network of assets and market selection position us for high quality, organic profitability growth and we remain focused on our M&A strategy of densifying our existing footprint across Canada and the United States through our robust acquisition pipeline."