GFL Bought SECURE With 75 Million New Shares and a $1B Loan. Does the Cash Flow Make Up for the Dilution?

On September 1, GFL Environmental closed its roughly C$6.4 billion purchase of SECURE Waste Infrastructure, a Calgary-based owner of landfills, treatment facilities, and injection wells across Western Canada and North Dakota. The price — C$24.75 a share, a 23% premium to SECURE's recent trading — is not the part an existing holder worries about. The part that matters is how GFL paid for it: it handed SECURE's owners 75,126,306 brand-new GFL subordinate voting shares plus a new US$1 billion term loan. Print new stock to buy a company, borrow to buy a company, and the question becomes whether what you bought grows your slice of the pie or shrinks it.

Start with how much of GFL's pie now belongs to SECURE's former owners. GFL ran with roughly 361 million weighted-average shares in the second quarter. Adding 75.1 million raises the count by about a fifth, and GFL itself put SECURE shareholders' resulting stake at roughly 16% of the combined company. Any deal that hands over a fifth of the business has to add a lot of profit per share just to stand still.

Here the numbers start to work in GFL's favor, which is the core of management's case. SECURE is not a low-quality asset bought on hope. It generated about C$501 million of adjusted EBITDA in 2025 and guided 2026 to C$520–550 million. It is also structurally cheap to run: it returned C$373 million to its own shareholders in 2025 through dividends and buybacks, evidence of a business that converts a high share of its earnings into free cash flow rather than reinvesting it all in heavy maintenance. GFL's claim is that this low-capex cash engine, added to its own base (full-year adjusted EBITDA guidance of roughly C$2.29 billion, excluding SECURE), raises free cash flow per share by 12% to 15% even after the share count grows by a fifth. GFL frames the deal as "net leverage neutral" and says it can end the year at its targeted net leverage in the mid-3s.

That is the arithmetic that matters, and the reason it moves per-share cash flow up rather than down is worth being precise about. Free cash flow, not EBITDA, is the number a value buyer cares about, because it is what is actually left after the reinvestment a business needs. Adding SECURE's roughly C$520–550 million of EBITDA to GFL's ~C$2.29 billion lifts combined EBITDA by just over 20% — roughly matching the ~21% increase in shares, so per-share EBITDA is close to a wash. But SECURE needs far less maintenance capital than GFL's hauling assets, so a bigger slice of its EBITDA converts to cash. That is the whole reason GFL can claim per-share free cash flow accretion in the double digits where per-share EBITDA is flat. GFL says pro forma free cash flow conversion lands between 40.5% and 42.5% of EBITDA, above what it was running on its own.

The loan is the easy part; the shares are the tell

The US$1 billion term loan, priced around 5% after interest-rate swaps and maturing in 2033, is not where the real cost sits. GFL bought a business whose EBITDA alone is several times the interest on that loan, so the additional debt service is manageable — about C$70 million a year against C$520 million-plus of acquired EBITDA. The loan was oversubscribed and GFL says it did not dent its credit rating as it pursues investment grade. The leverage gate is the bigger question: net leverage stood near 4.0x at June 30, and the company must genuinely land the year-end mid-3s target for the capital structure to stay intact. But the debt itself is serviceable.

The shares are the interesting part, and they expose a contradiction worth a holder's attention. GFL's management has spent the past year insisting the stock is undervalued. It has convened a special committee and taken preliminary offers to take the company private, with CEO Patrick Dovigi — who controls an estimated 27% of the vote and plans to roll his equity into any deal — arguing the interest "completely vindicated" the company's strategy. If you truly believe your shares are cheap, the worst currency to buy anything with is your own undervalued shares, and the cheapest currency is debt. GFL did the opposite of that logic: it borrowed only US$1 billion and paid 80% of a C$6.4 billion deal in stock. Either the "undervaluation" is real and GFL handed value to SECURE's holders at a discount, or the shares are fairly valued and some of the takeover narrative is marketing. The financing structure can't be consistent with both.

The deal is still a reasonable one on price. At roughly 12x EBITDA, GFL bought SECURE below the approximately 13–14x that GFL itself trades for, and well below solid-waste peers — Waste Management near 14x, Republic Services near 15x, Waste Connections near 17x. Paying a market multiple below your own peer set for a high-conversion, hard-to-replace asset is the kind of purchase that genuinely can earn back its dilution over time. And a business that trades around 13.5x versus peers in the mid-to-high teens is why the private-equity interest exists in the first place.

What to actually check

The take-private process is a real overhang but not a thesis. Buyout offers were expected around the third week of September; if one clears at a premium, that is a reason to own it; if talks die, the stock reverts to the operating story. A reader should not buy the shares to bet on the outcome of the auction.

The cleaner test arrives a few weeks later. GFL has said it will update its 2026 guidance to include SECURE when it reports third-quarter results, the first report that can actually show the accretion. That is where the 12% to 15% per-share free cash flow increase, the mid-3s year-end leverage, and the extra cash from SECURE all become checkable against reported numbers instead of promised ones. Right now GFL is a special-situation value candidate, not an income holding — the dividend yields roughly 0.15%, so there is no payout cushion to wait on. The thesis is a judgment that GFL bought cheap, durable cash flow and that the balance sheet holds; the Q3 guidance update is the report card on whether that judgment is right. If free cash flow per share climbs as modeled and leverage lands at target, the dilution is paid for. If either slips, the two costs of this deal — the shares and the debt — are exactly where the damage shows.