Dive Brief:

• GFL Environmental has acquired Future Environmental, an Illinois-based company specializing in used oil collection and other industrial services. In an interview with Waste Dive, GFL CEO Patrick Dovigi described it as "one of the premiere liquid waste businesses in the U.S."
• The move gives GFL a foothold in eight new Midwest states — Illinois, Wisconsin, Iowa, Kentucky, Oklahoma, Indiana, Missouri and Ohio — and expands its presence in Michigan. Dovigi said this move was always "part of the plan" as it "bridged the gap between Colorado and the Carolinas" within the recently acquired Waste Industries portfolio.
• According to Dovigi, Future Environmental generates an estimated $75-80 million worth of revenue in its current markets, collects more than 30 million gallons of used motor oil per year, and has a large industrial wastewater component. According to Future's website, the company comes with 14 facilities and more than 375 pieces of equipment.

Dive Insight:

Dovigi said this deal closed in mid-October but hasn't been publicized due to the much larger Waste Industries acquisition news announced around the same time. That deal has since been valued at an estimated $2.825 billion and added business for GFL in nine states. The Canadian company first entered the U.S. with the purchase of Michigan-based Rizzo Environmental Services in 2016.

One of the new states for GFL is Colorado, where Waste Industries acquired Alpine Waste & Recycling earlier this spring in a move that was geographically puzzling to many industry observers given the company's East Coast coverage area. With this latest deal, GFL suddenly has a presence in close to 20 states and prime leverage to follow a pattern that helped accelerate its rise up north.

"It's similar to what we've done with our Canadian business," noted Dovigi. "We'll now just flip flop, build up the solid waste business behind the liquid waste business, and build the liquid waste business out behind the solid waste business in the eastern U.S., which creates a contiguous platform basically from Colorado all the way to the East Coast."

Given the success of that strategy, which has helped make GFL one of Canada's largest players since it launched a little more than a decade ago, further growth can be expected. When asked about next steps, Dovigi said he isn't done expanding in Canada yet, but is also looking at U.S. expansion. Dovigi believes GFL's experience with higher recycling requirements and curbside organics collection, among other areas, puts it in a strong position to compete.

Following an April recapitalization deal in which BC Partners and the Ontario Teachers' Pension Plan became primary shareholders, Dovigi said GFL is now "well-capitalized" and has "a significant amount of equity dollars sitting on the sidelines to continue our M&A program" whenever the next opportunity arises.