All financial information is in Canadian dollars.

GFL Environmental closed a deal Monday to sell a majority stake in its environmental services business. The completion of the transaction first announced in January will allow the company to ramp up its growth in line with a three-year plan outlined by executives last week.

At GFL's Investor Day conference in New York City on Thursday, CEO Patrick Dovigi said the company would focus on vertical integration in the U.S., where it does the majority of its business, while continuing to pursue opportunities like EPR systems. The company will use $3.75 billion in proceeds from the sale to reduce its debt and $2.25 million to embark on its first major share buyback program as well.

"This management team knows how to make money," Dovigi said. "We've executed the plan, we've numbed the noise in the background and we've created a significant amount of equity value."

The company gave investors a close look at many metrics on Thursday during its first investor day presentation in three years. GFL has more than 15,000 employees, 7,100 trucks and generated more than $6.1 billion in revenue in 2024 excluding environmental services. Of its collection revenue, 39% comes from commercial customers, 34% comes from residential customers and 27% comes from industrial customers, according to the presentation. GFL is now a "pure-play solid waste business" after the environmental services transaction, Dovigi said. 

GFL also maintains a controlling interest in Green Infrastructure Partners, its infrastructure services business. The company announced it was spinning off GIP in 2022 amid a larger restructuring that also saw the creation of its environmental services segment.

On GFL's most recent earnings call, Dovigi said 2024 earnings before income, taxes, depreciation and amortization for GIP were in the "low $200 millions." He noted executives were eyeing three acquisitions for the business, and may try and monetize it further after the environmental services deal was complete.

"We have had a significant amount of reverse inquiry about that business," Dovigi said, cautioning he was not considering an outright sale of GIP. "There's a significant amount of value creation opportunities within that business, particularly coming out of this crazy inflationary environment." 

GFL will also remain active in the M&A space this year, targeting up to $700 million in spending. COO Billy Soffera said two-thirds of GFL's assets are in the U.S. with the remainder in Canada. Three-quarters of the company's business is in secondary markets, and Soffera said GFL is looking for opportunities to vertically integrate those markets through acquisitions and joint ventures.

Executives are also open to moving GFL's financial headquarters to the U.S. CFO Luke Pelosi said that the company is looking to make it into a top public market index in Canada or the U.S. If it misses an opportunity to be added to Canada's TSX 60 this year, it may consider a move to the U.S. Such a change would make GFL eligible for the S&P 400.

Pelosi said there's an opportunity to get indexed in Canada "sooner rather than later," which executives would like to see in order to further boost the company's position in public markets.

With the environmental services sale allowing GFL to significantly reduce its debt burden, executives also expect to achieve an investment-grade credit rating in the next 12 to 18 months. Dovigi said the company's standing has already improved its negotiating position with creditors, but an upgrade from Moody's, Fitch or S&P Global would further solidify those gains. S&P Global last updated GFL's credit rating in April, while Moody's declined to do so last year.

By 2028, the company is forecasting adjusted EBITDA north of $3 billion. To get there, executives expect $420 million of annualized earnings from tuck-in M&A, at least $375 million in organic growth, $175 million from extended producer responsibility and renewable natural gas investments and $150 million from solid waste self-help levers. Those levers include route optimization, new technology in trucks and at MRFs, updated pricing and other measures.

Pelosi said the company’s focus on tuck-in acquisitions makes GFL’s growth strategy predictable and emphasized that the company’s executive team has experience implementing those measures in the waste industry.

“The quantum of opportunity has never been greater,” he said, “and the speed with which we can realize that has never been better.”