M&A Announcement

Mar 16, 2021

Good morning, everyone, and welcome to the GFL Environmental Update Conference Call. All participants will be in a listen only mode. Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Mr. Luke Pelosi, Chief Financial Officer of GFL. Sir, please go ahead. Thank you. Good morning, everyone. Thanks for joining. I'm here with Patrick, and I'll turn it over to him in a moment, but first I just need to go through our forward looking disclaimer. Please note that we have filed a press release, which includes important information, and the press release is available on our website. Also, we have prepared a presentation to accompany this call that is also available on our website. During this call, we will be making some forward looking statements within the meaning of applicable Canadian and U. S. Securities laws, including statements regarding events or developments that we believe or anticipate may in the future. These forward looking statements are subject to a number of risks and uncertainties, including those set out in our filings with the Canadian and U. S. Securities regulators. Any forward looking statement is not a guarantee of future performance and actual results may differ materially from those expressed or implied in the forward looking statements. These forward looking statements speak only as of today's date, and we do not assume any obligation to update these statements whether as a result of new information, future events and developments or otherwise. This call will include a discussion of certain non IFRS measures. A reconciliation of these non IFRS measures can be found in our We'll try and be as brief as possible, then turn it over to Luke to go through some of the financial attributes of the acquisition and how that sort of And how that sort of layers into our existing base business plan and how that rolls over sort of 2021 and into 2022. So on the Terapeak acquisition, I mean, people have asked sort of why now. And I think from My job here is to create shareholder value. And when you look at what we did in 2020, particularly With the 2 larger deals in WCA and ADS and WM divestitures, those are largely sort of behind us now. Integration is largely complete And we still have another 4 plus months before we actually would be able to close on TeraVir in our opinion. Again, in keeping with our philosophy, we were able to negotiate something with a seller that was known to us that made sense for both of us. We got our hands on high quality landfill access, an organic business and environmental services business that's in our backyard at a price that to us was very compelling. We've looked at this business in 2014. We looked at it again in 2019, But both times, we couldn't get there because the battery recycling business wasn't of interest to us. And at this time, we were able to carve that business out. We started actually building out that that will be really in 2,008. So again, all of these markets are very well known to us. When you look at this deal, the power of the deal is really on Page 5. We're getting a highly complementary set of assets in Western Canada And as well as Central Canada, and this will give us a large presence in Eastern Canada, where we already have a large solid waste presence. This will afford us the ability to realize a significant amount of synergies over the near term. So I think, from my perspective and from you as shareholders, I mean, this was a very unique opportunity to acquire a unique set of assets. When you look at the Canadian business over the time of COVID, outside of Q2, our Canadian business largely performed exceptionally Well and was getting closer back to budget as we tail through the year. When you look at this opportunity, I think we've looked at it in the most Punitively possible, obviously, dying it off an LTM set of numbers that have some COVID impacts. So the numbers that we've put on the piece of paper here are the most punitive way we could think of presenting them. So we think there's significant upside to these numbers. When you look at the free cash flow of the business, again, we're modeling $45,000,000 again, largely debt financed. If you added back in the interest component of that, you'd be closer to $80,000,000 of free cash flow. Again, we think there's significant upside from the synergy numbers that we presented on the page. So again, from our perspective, again, very compelling on every financial metric. And I think we'll Over the near and medium term, this is going to create significant shareholder value for all of us. So with that, I'll turn it over to Luke and then we'll open it up for questions as I think it'll be a better use of our time. So if you look at Page 6 of the presentation, we've presented some high level illustrated pro form a financial information. I'll just walk through and orient the page and provide some high level sort of color. I think the math is pretty self explanatory, but really the first column Lays out the midpoint of the guidance that we provided late February. So this is before including any of the upside opportunities that we articulated. And you'll recall our color around the inherent conservatism we believe to be baked in the guidance, particularly as it related to the volume tied to sort of reopening activities. Recall, our guidance was predicated on the trends we were seeing at the beginning of the year and therefore did not sort of fully bake in the expected volume recoveries as markets reopen throughout our platform. So if you take the 1st column as our base business, what we've done in the 2nd column there is laid out numbers for Terrapure. As Patrick said, we're using LTM numbers here that are Inclusive of COVID related impacts, you can see the top line there, dollars 375,000,000 for context. 2019 for this business was $410,000,000 So clearly some conservatism in what we believe to be the ultimate Earnings power of this business, if you roll forward, we're ultimately going to have this in 2022 as our 1st year of contribution, A time for which we think the COVID related impacts will have subsided and there's probably meaningful upside above and beyond what we've shown here. We wanted the LTM numbers. It's inclusive of a $12,500,000 of synergies. We think that's a sort of near Term achievement is probably upside on top of that number. And then as Patrick said, have sort of fully burdened this for debt financing costs. This little column in the middle Anticipate $750,000,000 of incremental financing at 4.5% interest rate. In reality, By the end of the year with the free cash flow generation, depending on when this closes, the actual financing package may be something Then what we've articulated here. But for conservatism, we've used the full $750,000,000 at sort of 4.5%. The delta between the $7.50 and the purchase price is reflective of cash on hand anticipated to be available to the company by the end of the year. And then if you think about what that does to the pro form a column, so on the right, Basically accretive across every financial measure from margins to free cash flow margin to free cash flow conversion, which as we said in our February call is going to be continued focus. We're just going to keep speaking to those financial metrics on each of the calls that we have. And from a financial metric perspective, we believe This ticks all of the boxes being immediately accretive to the free cash flow lines at the tune of almost 10%. At the bottom of the page, we just really highlighted The continued evolution of our total revenue by segment, if you go back to 2017, you can see at that time solid was 70% of the total business. We ended late last year with solid representing high 70s and even inclusive of the liquid waste component that's coming with Terrapure. The model still suggests as we go forward, we're still solid is going to continue to outpace in terms of growth and be 80% plus of the overall business in the near term. And that's what we're highlighting at the bottom of Page 6. Page 7, just quickly, this is the bridge that we had presented as Part of our guidance showing the base 2021 guidance and then upside opportunities, areas that we thought we could Change during the year, just had some uncertainty as to when in the year, and therefore, we presented them in this manner. All we've done on here is updated the page to reflect The contribution from Terrapure. And so you can see the first step there is the incremental $45,000,000 And so if you put that all together, you can see ending the year with a potential free cash flow run rate in the range of $575,000,000 to $625,000,000 This Other steps on the page, the potential incremental acquisitions, the refinancing, the redeployment, we are still progressing on each of those steps and still anticipate to be able to deliver on those by the end of the year and we will update you throughout the year as we affect those changes. With that, operator, we're going to turn the call over for questions and answers. Our first question today comes from Kevin Chang from CIBC. Just a couple For me, just one on the cross selling opportunities. Can you give us a sense of how much of TerraPure's Customers may have used more than one of their services versus maybe what you see within your own Canadian platform and just opportunity to accelerate that cross selling as you look to capture more of your customers' wallet? Yes. I think in Canada, particularly, if you look at where we're acquiring these assets, I think the interesting part about this business is, I don't think there's a significant amount of cross selling within their existing book. But when you look at the ability, we're acquiring a business that We have solid waste presence in each one of these markets. We're going to have a very large opportunity to cross sell our solid waste services Into those 7,000 customers that Terrapure has today. Okay. That's helpful. And then just second one for me. Once the Terrapure deal is consummated, just what is your pipeline within Canada look like in terms of Talking opportunities. Does the acquisition of Terapear increase that runway as it gets you a little bit further East, just a little bit denser out west and in Central Canada? Yes. I mean, Canada has always been home. Like we said, If you look at the pipeline today, our pipeline today is almost half of that pipeline today is in Canada. I think the size of the opportunities in Canada continue to be smaller. Just they're sort of more in the $1,000,000 to $5,000,000 of EBITDA range Some of the opportunities in the U. S. That continue to be a little bit larger than that. But I think from our perspective, I think The factory will continue in Canada, particularly with the singles and doubles to tuck into again, just this footprint and the expanded footprints, I mean, I think now when you look at the business, we literally have coverage of all of our services from basically Vancouver Island all the way to Newfoundland, which is highly compelling from our perspective. If you look at their solid waste presence, particularly In the Maritimes, since we started building out that business in 2015, again, we looked at the business that Terapear had acquired Few years ago, when they were at the successful performance of that, which is a company called Enviro Systems, which gives us A big presence out there and has been a large player out there for a long time. So, I think for all the reasons we articulated earlier, That's why it sort of makes sense. And I mean, I think getting a land sell asset like we're getting that is within spitting distance of the Greater Toronto Area I just recently got a 14 plus year expansion. I mean, I think that's an extremely unique opportunity. And then having a highly complementary organics business To ours, again, we continue to see big opportunities in the organic space. And I think that's going to continue rolling out into the U. S. As well. The people are continuing to continues to be a focus on diversion of different food waste streams from landfill. So I think we're this positions us extremely well with an asset that is literally in our backyard and we were the architect of building this business across Canada really since September of 2,008, which is when we closed our first acquisition in the space and Now you sort of layer on all those different pieces to the puzzle. I mean, I think it just really solidifies our presence here and uniquely positions us for future growth. That's great color. Thank you very much and congrats on the deal. Thanks, Kevin. Our next question comes from Tyler Brown from Raymond James. Hey, Patrick. So hoping for a little more color on the Stoney Creek Landfill. It Seems obviously like a very interesting asset. So first off, maybe how much is that landfill permitted to take and kind of what is its current intake? Yes. So the site is basically permanent for 700,000 to 750,000 tons a year. I think one of the more compelling things going back to Luke's point of we've taken a conservative view Their earnings numbers that are presented here, I mean, they went they were going through an approval process to have that landfill permit Standard and extended and through that process, what they do is back off on the fill rate. So if you look at the numbers today, the intake was basically 275,000 to 100,000 tons a year for the last couple of years when they went through that permit increase process. Our Anticipation is that number will trend back closer up to 600,000 or 700,000 tons a year, particularly with the power of our existing platform. And we will go to maximize price at that landfill and put in the highest Price tons that we can. So I think there's a big opportunity for us, specifically at that asset that will provide incremental upside to what we put on the page. Okay, right. So lots of upside from utilization, but to be clear, that's not in that $12,500,000 of synergies? No. Okay. And then again, kind of without getting too specific, is it safe to assume the gate rates for industrial waste are multiples higher than what MSW WK rates are in the region? Yes. Okay. And then just my last one on the CapEx. So you got this 14 year expansion Or not you, but Terapear got this 14 year expansion. But to be clear, when we see expansions like that, they're usually a big sell build out. So is that the case here? Is that contemplated in the $30,000,000 of CapEx? So again, we've taken a very conservative view on CapEx for this business. I think when you look at it, the lion's share of that CapEx is going to get spent under the existing sellers watch over the course of this year. So by the time we close that CapEx spend you made, I think the interesting part about this expansion Well, they've got a vertical expansion, not a horizontal expansion so far. So I mean, when you think about again, from a liner perspective, the cost to go up are a lot cheaper than going wide. So again, that will largely be done and I think Position us very well from a free cash flow perspective. If you look historically, the business ran at sort of 5% to 6% CapEx. We've modeled in 7.5% -ish. Again, just taking a very conservative view to take into consideration any unknowns. But again, we feel very comfortable with the potential upside from the free cash flow because of that asset. Yes, Tyler, to your point on the cell expansion, I mean, I think there's sort of $10,000,000 to $12,000,000 this year, but as Patrick said, It's going to be substantially on prior owners watch depending on close a little bit of that may trickle into our spend. But the go forward, that will be behind us, that sort of one time cell build out. Okay, perfect. All right. Thanks, guys. And our next question comes from Michael Hoffman from Stifel. Please go ahead with your questions. Thank you very much. Good morning, Patrick and Luke. Hi, Michael. Could you for the Americans help us understand what the milestones are for the Canadian Competition Bureau, sort of when do you file? How long does it take? What are we looking at? So our hope our anticipation is we'll file By the end of the week. It's basically a 2 week grace period for the competition bureau to review the file. And then there's basically a 45 day clock that starts ticking. In that 45 day, they can come back and ask for a second request. If they come back and ask for a second request, that profit generally extends for another 30 to 60 days. And then generally, at the end of the 30 to 60 days, Post that initial sort of 60 days, you'll have remedy solutions presented by the company's If there are any issues. I mean, we don't anticipate any material issues here. I think there's enough Other competition in the markets where we are, yes, it will be we're requiring a large presence, but at the end of the day, there's enough competitors in the markets across Canada that we believe there'll be minimal issues here. And given I think there's a lot of other Files on the Competition Bureau's debt today. So I think we will work with them as we worked with the DOJ and the Competition Bureau in the past to get through these efficiently and we feel very confident that we'll get through. I mean, we looked at these all these issues in 2014 and we looked at all these issues in 2019. So we were very well prepared knowing if there'd be anything, but our view is there's very little that Could be a concern for the Competition Bureau. Okay. And then can you share with us for modeling purposes, how would we Should we split the sales and EBITDA between solid waste and liquids of the $375,000,000 and the $110,000,000 Yes, Michael, I'd say the $375,000,000 again, this is the LTM number. Obviously, 2022 will be we'll At that time, it was likely going to be something greater, but $375,000,000 right now is split a third of the revenue to solid and 2 thirds to liquid. We're still internally making sure we're mapping that how it lines up with us. There might be a little bit more solid when all is said and done. But at the EBITDA level, with that landfill, the EBITDA is sort of higher margin. So you're probably having on that solid revenue that's Coming in, it's sort of mid to high 30s EBITDA margins and that yields the liquid business is sort of low to mid-20s. Again, we're saying that's a very sort of conservative starting point and we think that ramps up quite quickly from there. Okay, that's helpful. And then Are there any things within your balance sheet that from a timing standpoint where you might be able Couple the financing of this and a refinancing of the balance sheet and come out of this at a lower cost. Should Should we be aware of timing issues related to instrument restraints and things like that, restrictions? Yes. I mean, we're going to be opportunistic, obviously. We have time. I think from our perspective, refinancing like Luke has on one of the pillars here of for the adjusted free cash Full bridge. We were we're looking at there's a whole bunch of as always, the market continues to evolve And there is a significant amount of products available to us. But yes, I mean, I would anticipate that interest costs are going to Decrease and our average coupons are going to decrease at the same time. So we will look at a holistic financing package As we get closer to closing. Okay. And then just for clarification from my part, I was in the understanding that In Canada, MSW tip fees are actually pretty steep. They're $60 to $80 a ton. And that industrial your opportunity here is to improve the pricing in Canada pricing. Your disposal costs are pretty Because you're coming into Michigan and that's why and this is so attractive as you've got an opportunity to walk this up for in Canada volume. That's yes, that's right. I would say depending on what part of Canada you're in, I mean disposal fees range from $30 a ton to $120 a ton. If we focus on the Ontario market, Which is the MSW market is generally, I would say, controlled in Ontario by 3 parties, Which is a company called Walker Brothers and then you have Waste Connections and then you have Waste Management that all have landfills in Ontario. The lion's share of those landfills take Industrial commercial volumes in MSW, they're not taking industrial waste, particularly with the proximity to Toronto. That's the benefit of this landfill. I mean, as you know, people look at disposable on a T and D basis. I mean, the lion's share of the volumes are in the GTA. So I think when you look at the gate rates today for solid waste, I mean generally range between $30 $40 at the gate. I think when you look at the industrial landfill rates Today, those are moving up north of 50 and probably being between somewhere between 60 70 at the gate. Again, just because there's scarcity value of opportunities to dispose of those materials, and this landfill happens to be permitted for those. So the highest and best use will not be to put MSW, particularly with our proximity to Michigan and obviously with our newly acquired landfill in Michigan as part of the EDS transaction. So we'll continue internalizing as much volume as we can into Michigan from our facilities and then Put the highest and best used tons into this landfill in Stoney Creek. Okay. And since we've got you, could you give us a quick mid quarter update on the state of business of existing GSL? Yes. I mean, we were through January February. I think everything continues to trend on plan, Even with, I would say, a little bit of a slower reopening in Canada so far. I mean parts of Canada are opening up, but there's still Toronto and Montreal continue to Take the perspective that locking people in their house is better than letting them out. But as vaccines Absolutely starting to trickle in and we're supposed to get a big ramp in vaccines here over the next 6 weeks. Our anticipation is that over the next 8 weeks, things are going to start Opening up and the hope is by June 1, we're somewhat back to normal. But I think from outside of that, Everything is trending in line. And I think, obviously, we don't see any surprises The previous guidance that we put out. Thank you very much. And our next question comes from Hamzah Mazari from Jefferies. Please go ahead with your question. Hey, good morning. Thank you. My first question, Patrick, it's just how do you think about this deal compared to others you've done, just in terms of your Excitement level, confidence level, how do you think about ROIC on this deal versus others? And then do you have an updated view on non core asset sales post sort of this announcement? Yes. I mean from my perspective, And as most of you know, I mean, you follow the market. I mean, to get an asset and assets of this quality at this price Don't come along every day and I think it just speaks to the way that we are able to get deals done and Not to toot anybody's horn, but I think the guys on the BD side and on the environmental side and on the legal side, I mean, just were able to move Quick and the seller had a reason that he wanted this business carved out because he had other plans for their battery business And we were able to move and get it done quickly. I mean, I think on any financial or operating metric, I mean, I think, like I said, From a complementary perspective, I don't think there's any asset that's any better than it could be in Canada. I mean, when you look at those maps, literally their business is sitting on top of ours. So again, the opportunity for us to realize meaningful synergies, I think are exceptional. I think that when you look at some of the recent trades in the private equity market, You know, of environmental services business, solid waste businesses, I mean, these things are trading now sort of between 12.5 and 15 times privately. I mean, there's been big trades. I think it'll be you look at the Covanta assets and the guidance that's been given on the environmental services business for Covanta, I mean, significantly higher multiple than what we're acquiring for this business. And from a return on invested capital perspective, particularly with us not Having these any equity advances given the multiple and synergy opportunity here, I mean, I think for us as shareholders, it's very compelling. And From return on invested capital perspective, I mean, on an unlevered basis and a levered basis, I think it's very good. And I think if you look at the opportunity of what that looks And what this will look like for us over the next 3 years, it's going to be as good or better than any deal in my view that we've done that's of any size or scale. I think it's just it's a great deal for us and it's a great deal for all the shareholders. Hamzah, something I'd add, I think it's a unique Position when we have these deals that we've looked at several times over the years. And I think as Patrick said, we first looked at this almost 7 years ago and you see the forward projections of what the business is supposed to do. And we looked at it again sort of 2 years ago and then looking at it again today and being able to have that sort of visibility and look back, I think also affords you a very unique sort of perspective and really understanding what the business is and what it is capable of. And anytime we've had instances and scenarios like that, We've had great success at being able to sort of predict the upside and what that was actually going to look like. And so having that 7 year history with this business, I think really informs our view when we say this $375,000,000 $110,000,000 that we're starting is a highly conservative number that we can outperform. I think that's Greatly substantiated and bolstered by the outlook back perspective we have. Got you. Very helpful. And then just on the environmental Maybe if you could just talk about the mix a little bit in terms of field services, oil recycling, liquids. What are you doing right now that they do an environmental what are they doing that you don't do an environmental today? It's literally largely the same business. I mean, I think when you think about it, I mean, there's again a little We both do field services. We both do collection services and we both have wastewater treatment facilities and obviously Solidification pads, etcetera. I think the business is, again, largely the same. So from a service Perspective, it's not as if we're going into any different sort of LOBs. Obviously, the organic business is a business we're in today. We operate similar businesses, obviously. So that's a business very well known to us. And then really just getting our hands on the landfill asset, Again, we're in the landfill business and other markets. This just gives us one and probably the largest market in Canada, Which is, call it, 45 minutes from Toronto, which is, again, I think very unique and positions us very well for the next number of years. And then just lastly, does this change view of further M and A? Your leverage ticks up a little bit, but obviously, synergies are low and numbers seem pretty conservative. So maybe the leverage doesn't pick up, But is there a view on more M and A after this? Yes. I mean, like we said on the last call, I mean, we had A number of smaller opportunities under LOI, by and large, the lion's share of those are in solid waste. So I think from our perspective, those will continue. The factory will carry on and sort of executing on those. I think There continues to be a significant amount of opportunity in that wheelhouse where we continue to play, which The $1,000,000 to $5,000,000 EBITDA business is that top nicely into our solid waste platform in Canada and in the U. S. So I think our expectation is, again, going back to Luke's building blocks on the free cash flow bridge, our anticipation is that we will Definitely meet or exceed the expectation of the smaller type of opportunities that will tuck into the platform. So This doesn't really change anything, sort of different work stream and typically a different team that's going to be managing the integration of this business. Hamzah, on the leverage implications, I mean, as we said, even at the WCA, I mean, if we're pro form a now we're going to end the year at sort of 4, 6. If you roll that forward, you can still execute on the M and A pipeline through all of 2022, acquiring the sort of $40,000,000 to $60,000,000 of EBITDA, Thanks, 7.5 times. And you still delever sort of quarter to 30 basis points. So the leverage impact, we're going to Maintain our philosophy on leverage, which is that we said for the right deal, we would temporarily take it up to that sort of 4.6% level. But the deleveraging even when executing on the M and A pipeline, the model still deleveraged, so 25, 30 basis points through 2022. Great. Thank you so much. Thanks, Hamzah. Our next question comes from Walter Bracklin from RBC Capital Markets, please go ahead with your question. Yes, thanks very much. Good morning, everyone. Good morning, Walter. So first question just on the speed of synergies. I think the 12.5% that you'd indicated are primarily administrative. Correct me if I'm wrong, but those can come in pretty quickly. But the follow-up there is, how long would you say when you lump in all the other upside opportunities could they Take to bring into your operations, particularly around ramping up Stoney Creek to the level that you're mentioning, Patrick, lumping it all together, roughly what would be the timeframe of those extra synergies essentially? Yes. I mean, I think a realistic timeframe is probably 18 months To get everything sort of ticked and tied and tucked in, I think it's probably a realistic timing expectation to get sort of Fully executed on every one of those opportunities that we see today. And the 12.5% can happen pretty quickly though? The dormant out is going to happen, yes, very quickly. Okay. Looking at your so this was you mentioned 2 thirds liquid, But obviously, we'll come down as Stoney Creek goes up. But just curious as to whether the focus on liquid waste is it's a market already in Canada and you're buying a competitor here. When you look at your the potential in the U. S, do you consider liquid waste as an Opportunity to grow in the U. S. Via acquisition in that particular space or are you more focused on solid waste in your U. S. Expansion? I think the most accretive dollars we'll spend in the U. S. Is definitely going to come on the solid waste side. Just when you look at where you deploy dollars today and we've acquired again these post collection operations, Transportation, landfills and some of the recycling facility builds we're going to look at. We're going to look at businesses, particularly in the U. S. That are going Really expand and be able to sort of integrate Further tons into those landfills where we have fixed cost basis, because I think that's going to drive a higher return than deploying dollars on other opportunities. Okay, great. That's all my questions. Thank you. Thanks, Walter. And our next question comes from Rupert Merer from National Bank. Please go ahead with your question. Good morning, guys. Just a follow-up on the projected CapEx rate. Can you give us some color on how the age of the TerraForm fleet compares with yours and maybe the age of their facilities versus your facility? Yes, Rupert, what I'd say on the fleet, it's middle of the fairway to slightly better than ours Is what on their fleet level, again, liquid waste, fewer actual power units on the collection side than you have sort of tankers And other trailers that you use for collecting waste waters. Facilities, I'd say a bit of a mixed bag. But as we said, if you look at the maps, there's going to be opportunity for consolidation, particularly on non permitted sites. So just regular hauling yards, where maybe you might need some CapEx maintenance dollars, there'll be sort of efficiency by consolidating some of those. But on balance, the fleet where the majority of the dollars are, let's say, middle of the fairway. Hey, great. And if you look at the EBITDA margins on Slide 6, it shows slightly better EBITDA margins for TerraForm with Synergy. It looks like the margins may be about The same as yours before the synergy. If you compare TerraForm's operations to GFLs on an apples to apples basis, the various Business segments. Is there any noticeable differences in the business model in terms of your gross margins, returns on capital and G and A? No, what I'd say, I mean, if you break it apart, you look at their landfill, you look at their organics, you Their collection, waste processing, I think each of those service lines have a very comparable margin profile to the equivalent in the GFL world. I mean landfill, very high EBITDA margin, organics, good EBITDA margin, collection sort of lower. So I think that looks all comparable. I think part of the $12,500,000 synergies is helping their blended margin get sort of accretive to where we are at. And that's really just leveraging the GFL back office and the scale. But I think by and large, as Patrick had articulated, It's a very comparable business to what we operate today and we think bringing them 2 together and the efficiencies in that, there's opportunity to go above where it is today. But I wouldn't say there's any structural differences between their collection or post collection and the margin thereof versus what we And can you give us a little color on how that business has trended over the last few years and maybe a little color on how they We're able to manage through the pandemic and what the business might look like once we get through the pandemic on a rebound. Yes. So over the years, I go back to my comment, one of the beauties of an opportunity like this is when you've seen the forward projections several times, and again, we saw them in 2014, Several times and again we saw them in 2014 and we saw them in 2018 and now we're seeing how the actual sort of played out. And I think by and large, the strategy and that the guys at Virgil and Terapear have employed has worked out very well. And they've grown A very successful business across Canada. It's performed well, margin expansion and the other Upside opportunities that were highlighted in Sims from 4 or 5 years ago, the guys executed on. So I think again having that look Back, Barry, sort of helpful. Look, COVID in Canada had significant impact. If you look at our businesses down sort of high single digit Organic volume and I think Therapyr was no different just as you had the sort of shutdowns of industrial and commercial customers, car dealerships, etcetera. But similar to what we're seeing, what Patrick articulated the 1st couple of months of the year, I think they're now enjoying in their business And you're seeing with the reopening activity, those customers reengaging in the volume coming back. So as we said before, I mean, 2019 pre COVID was a $410,000,000 Revenue business, which was growing from there, 2020 with COVID sort of down close to 10%. We think that sort of all comes back as the reopening happens. And again, with an anticipated closing of late 2021, Effectively, we're looking at a 2022 number in reality and we'll think we will benefit and enjoy Those return volumes, but I think the team was faced with a tough year in 2021 like everyone in 2020 like everyone else was And through cost control and other measures, did a great job managing through. But again, as Patrick said, buying off the COVID low, if you will, we think positions us very well sort of going forward and speaks to even more Our next question comes from Mark Neville from Scotiabank. Please go ahead with your Hey, good morning guys. Hey Mark. Just curious, the $470,000,000 of revenues, would that have been peak revenue for this I mean, there's been some M and A through 2017 2018. So it's sort of hard to But yes, I think that if you look the year before, it was a little bit less than that. Okay. And I guess to your point, you've looked at this a few times. I'm Curious sort of how it's evolved versus I think you touched on this, but how it's evolved, how much M and A they've done sort of organic expectations for this business and Maybe if there's any opportunities you see within the business to improve margins or change things up. Again, I know you touched on some of this, but yes. Yes. I think from it's evolved. I mean, again, 2014 was a carve out from Nualta, which was complicated. Again, battery business was interesting, but It's something I think that we were going to be highly focused on. So again, it didn't work. We tried to get them to retain the battery business they didn't want to. In 2019, again, we looked at it again, attributed pretty low value to the battery business, not because we didn't think it was not a good business, but just From our perspective, it just didn't really fit with what we did. So again, I mean, the business evolved under Burt Schill's ownership Significantly, I mean, they did a lot of great things. I mean, Todd Moser and Ryan Reed, who were took that business, I've done a lot with it over the number of years. I mean, when you look at what it was in 2014 and what it was in 2019 and what it is today, it's significantly different business. I mean, they've done a bunch of M and A over the years. I mean, I think when you look at one of the major acquisitions they did was a company called Enviro Systems, which Was the business that literally had significant amount of market share in Nova Scotia, Newfoundland and New Brunswick. They've done they bought out their largest sort of battery recycler in Ontario, which is a company called Tonoli. So I mean that business the battery business continued growing over the years and then they had done a bunch of smaller tuck in M and A on the environmental services and the organic side, Because previously they weren't in those lines of business. So I think they did a lot of good things with it. I think from our perspective, We've got, I would say, the Bill Belichick and Tom Brady team in our business. So my anticipation is and my Expectations are that we will be able to take that platform and just take what they gave us and be able to sort of turbocharge that and just Execute on the playbook that we know here and I think that will deliver outsized results. I think as Luke said, we've taken a very conservative view on it and In keeping with the philosophy is under promising, over delivering, we will do that and the team will do that. And listen, I know what the internal conversations have been with the team And everyone is extremely excited about it and has lots of ideas. So I think over time, this is going to be a winner for us and we're starting at a great point from a Purchase price perspective and if you buy right, you generally end right. And I think layering all those together, particularly with our know how in Canada, we're going to be very well positioned here. Okay. That's great. That's helpful. Maybe just one follow-up to, I think it was Walter's question around the synergy timing. Patrick, I think you said 18 months. I'm just to clarify, would that Sort of ramping up the volumes into Stoney Creek? Yes. All right. Thanks guys. Thanks for the time and congratulations. And our next question comes from Tim James from TD Securities. Thanks. Good morning, everyone. Good morning. And congratulations on the transaction. Just want to go back to the Stoney Creek Glenn, Phil, for a minute. Does acquiring that asset to open up the doors or maybe facilitate more Tuck in the kind of Ontario or Central Canada region in particular. I mean, does it make certain M and A more attractive because you now own that asset? I mean, I think it's just a synergy perspective, the more you can internalize clearly makes things, I would say, more interesting. So yes, I think that Hold true. I think when you look at our existing business, there is a large internalization opportunity as well with our existing business On various sort of service lines, whether it's our solid waste business, internalizing some of the asbestos and other things. If you look at our Liquid waste business and the solidification process of some of our liquid waste business, the ability to internalize more tons and internalize more tons directly from our existing customer base. So I think you look All that, I think you're going to have, again, like I say, a recipe for success and the ramp up in that landfill is going to come faster than maybe one would have thought. Okay. Thank you. And then just one more question kind of maybe tied to that. As I look at the business that you're buying geographically and think about the synergies beyond the Ethically and think about the synergies beyond the $12,500,000 that you've identified. Is there any regions where There's greater opportunities for synergies. I mean, as we've talked about Stoney Creek. Does that mean that sort of again, if we think about sort of Total dollars of opportunity, the revenue or cost synergies that, that could be or would be more focused in kind of Central Canada region? I think that's one of the opportunities. But I think when you look at the cost synergy side, I think that's going to largely come from Central Canada and Western Canada. I mean the big the synergy opportunity on Eastern Canada, really the Maritimes is going to be largely around cross selling our solid waste business Around the tariffier customers, we already may use some of them. But I mean, at the end of the day, each one of those customers has a solid waste need, So going in and cross selling, but I think from a cost perspective and a cost synergy perspective and facility consolidations, etcetera, That's largely going to come in Central Canada and Western Canada. Okay, great. Thank you very much. Thanks, Tim. So thank you, everyone. Thank you. Sorry. I'm just going to turn the floor back over to you, sir. Please go ahead with closing remarks. So thanks, everyone, for joining the call, and we look forward to speaking to everyone after And ladies and gentlemen, with that, we will conclude today's