GFL workers collect recycling outside homes in Toronto. The company is expanding its footprint in Western Canada with the purchase of Secure Waste Infrastructure.Cole Burston/The Globe and Mail
GFL Environmental Inc. GFL-T is buying Calgary-based Secure Waste Infrastructure Corp. SES-T for $5.4-billion to expand its footprint in Western Canada, but investors balked at the transaction and GFL’s shares slumped 10.1 per cent on the news.
GFL is paying $24.75 per share for Secure, a 16-per-cent premium to the target’s last closing price. GFL will mostly use shares to pay for the deal, with Secure agreeing to receive a split of 80 per cent stock and 20 per cent cash.
If the transaction is approved, Secure shareholders will own 16 per cent of the combined company. Two Secure investors that collectively own 20 per cent of its shares have already agreed to vote in favour of the transaction.
The case against the businessman accused of targeting waste giant GFL in shootings
From its founding in 2007, GFL has expanded aggressively through acquisitions in Canada and the United States, and it now has more than 270 deals under its belt. The company services hundreds of municipalities across the two countries and, before markets opened Monday, it had a market value of around $22-billion on the Toronto Stock Exchange.
However, GFL’s shares fell after the deal was announced. On a conference call, analysts repeatedly questioned GFL about the rationale for the deal, considering Secure isn’t focused on GFL’s bread and butter of municipal waste.
“This is not a change in strategy or direction,” GFL chief executive officer Patrick Dovigi said in response. “The lion’s share of our capital is going to continue to get spent on solid waste.”
Mr. Dovigi added that GFL does not intend to expand in the industrial waste business. “This is literally just to increase our exposure to Western Canada,” he said, adding that GFL’s management sees the region as the country’s economic growth driver over the next few years.
Historically, Secure was a Canadian energy services company, but it has repositioned itself over the past five years. The company operates in Western Canada and North Dakota, and it generates 85 per cent of its revenue from industrial waste management, which includes the processing, recovery and disposal of waste generated by energy and industrial companies.
The remaining 15 per cent of its revenue comes from operating energy infrastructure, which includes running crude oil terminals and storage facilities.
Secure’s shares have been on a tear throughout its repositioning, with the stock up 430 per cent over the past five years prior to the deal announcement. During this time, Secure has merged with Tervita Corp., divested some non-core oil field services business and acquired four metals recycling businesses.
“SECURE’s business has become significantly more resilient over the last five-years and is more akin to its residential and industrial waste peers,” Ian Gillies, an analyst at Stifel, wrote in a note to clients.
Because Secure’s shares have performed so well, GFL is buying the company at an elevated premium, with the purchase price amounting to roughly 25.5 times Secure’s earnings, according to Mr. Gillies.
GFL, meanwhile, was on a tear for its first few years as a public company. The waste giant listed on the Toronto Stock Exchange in March, 2020. Over the past year, however, GFL’s shares dropped 12 per cent amid a sell-off in the municipal waste sector.
The sell-off of GFL continued Monday on the back of the deal announcement, even though the company will pay for Secure mostly using shares. GFL is known as a serial acquirer that uses debt to fund its acquisitions, and its leverage eventually swelled to $9.6-billion, which started to concern investors. To pay down debt, GFL sold a majority stake in its environmental services division in January, 2025.
GFL also brought on a new private equity investor for its infrastructure arm, Green Infrastructure Partners Inc., in 2025, delivering $200-million in proceeds to GFL. GIP handles everything from road paving to excavation and demolition, and GFL remains one of GIP’s major shareholders.
GFL’s deal for Secure comes days after the company got some clarity on a long-standing police investigation into shootings that targeted homes of its executives and executives at GIP.
On Friday, Toronto Police’s guns and gangs unit charged Ilan Philosophe of Astro Excavating Inc., a competitor to GFL and GIP, in connection to two of the attacks.
That charges have been laid against a competitor marked another twist in a saga that has roiled some of Toronto’s most affluent neighbourhoods, rattled publicly traded GFL and shaken its top executives.
For months, the violence has been the talk of construction sites and Bay Street alike, bringing the stuff of underworld television dramas, chillingly, to real life.
Mr. Philosophe briefly appeared in bail court again Monday morning, but his case was put over until Tuesday. He remains in custody. In interviews with The Globe and Mail over the past year, he denied any involvement in the shootings. “I have absolutely nothing to do with any of this, attacks or anything, on GFL. That’s 100 per cent,” he said.