Good morning, everyone, welcome to the GFL Environmental update conference call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. 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, let's 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'll 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 occur 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 filings with the Canadian and U.S. securities regulators. I'll now turn the call over to Patrick.
Good morning, everyone, and thanks for joining us. From my perspective, 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 layers into our existing base business plan and how that rolls over to 2021 and into 2022. On the Terrapure acquisition, people have asked why now, I think from my perspective, my job here is to create shareholder value. When you look at what we did in 2020, particularly with the two 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+ months before we actually would be able to close on Terrapure 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 assets, an organic business, and environmental services business that's in our backyard at a price that, to us, was very compelling. We looked at this business in 2014. We looked at it again in 2019. Both times we couldn't get there because the battery recycling business wasn't of interest to us. At this time, we were able to carve that business out. We started actually building out this LOB really in 2008. 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 five.
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. I think from my perspective and from you as shareholders, 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 tailed through the year. When you look at this opportunity, I think we've looked at it in the most punitive way possible, obviously dialing it off an LTM set of numbers that have some COVID impacts.
The numbers that we've put on a piece of paper here are the most punitive way we could think of presenting them. We think there's significant upside to these numbers. When you look at the free cash flow of the business, again, we're modeling CAD 45 million, again largely debt-financed. If you added back in the interest component of that, you'd be closer to CAD 80 million of free cash flow. Again, we think there's significant upside from the synergy numbers that we presented on the page. Again, from our perspective, again, very compelling on every financial metric, and I think over the near and medium- term, this is going to create significant shareholder value for all of us. With that, I'll turn it over to Luke, and then we'll open it up for questions, as I think that'll be a better use of our time.
If you look at Page six of the presentation, we've presented some high-level illustrated pro forma financial information. I'll just walk through and orient a 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 in late February. 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 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 reopened throughout our platform. If you take the first column as our base business, what we've done in the second 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, CAD 375 million. For context, 2019 for this business was CAD 410 million. 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 first 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 CAD 12.5 million of synergies. We think that's the near-term achievement, and there's probably upside on top of that number. As Patrick said, have sort of fully burdened this for debt financing costs. This little column in the middle anticipates CAD 750 million 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 different than what we've articulated here. For conservatism, we've used the full CAD 750 million at sort of 4.5%.
The delta between the CAD 750 and the purchase price is reflective of cash on hand anticipated to be available to the company by the end of the year. If you think about what that does to the pro forma 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 a continued focus. We're just going to keep speaking to those financial metrics on each of the calls that we have. From a financial metric perspective, we believe this ticks all of the boxes, being immediately accretive to the free cash flow line to the tune of almost 10%. At the bottom of the page, we've 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. Even inclusive of the liquid waste component that's coming with Terrapure, the model still suggests as we go forward, solid is going to continue to outpace in terms of growth and be 80%+ of the overall business in the near- term. That's what we're highlighting at the bottom of Page six. Page seven, just quickly, this is the bridge that we had presented as part of our guidance, showing the base 2021 guidance. Upside opportunities, areas that we thought we could affect change during the year. We just had some uncertainty as to when in the year. Therefore, we presented them in this manner.
All we've done on here is updated the page to reflect the contribution from Terrapure. You can see the first step there is the incremental CAD 45 million. If you put that all together, you can see ending the year with a potential free cash flow run rate in the range of CAD 575 million-CAD 625 million. These other steps on the page, the potential incremental acquisitions, the refinancing, and 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.
Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one, using a touch-tone telephone. To withdraw your questions, you may press star and two. If you are using a speakerphone, we do ask you, please pick up your handsets before pressing the keys to ensure the best sound quality. Once again, that it's star and then one to ask a question. Our first question today comes from Kevin Chiang from CIBC. Please go ahead with your question.
Hi. Good morning, thanks for taking my question here. 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 the opportunity to accelerate that cross-selling as you look to capture more of your customers' wallet?
Yeah. 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. Just second one for me. Once the Terrapure deal is consummated, just what does your pipeline within Canada look like in terms of tuck-in opportunities? Does the acquisition of Terrapure increase that runway as it gets you a little bit further east, a little bit denser out west into Central Canada?
Yeah. Canada's always been home. Like we said, if you look at the pipeline today, 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 CAD 1 million to CAD 5 million of EBITDA range versus some of the opportunities in the U.S. that continue to be a little bit larger than that. I think from our perspective, I think the factory will continue in Canada, particularly with the singles and doubles to tuck into.
Just this footprint and the expanded footprint. 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. We looked at the business that Terrapure had acquired a few years ago, and they were the successful performer of that, which is a company called Envirosystems, which gives us a big presence out there and has been a large player out there for a long time. I think for all the reasons we articulated earlier, that's why it sort of makes sense.
I think, getting a landfill asset like we're getting that is within spitting distance of the greater Toronto area, that has just recently got a 14+ year expansion, I think that's an extremely unique opportunity. Then having a highly complementary organics business to ours, again, we continue to see big opportunities in the organic space. I think that's going to continue rolling out into the U.S. as well, as there continues to be a focus on diversion of different food waste streams from landfills. I think 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 2008, which is when we closed our first acquisition in the space.
Now you sort of layer on all those different pieces to the puzzle, 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. Please go ahead with your question.
Hey, good morning, guys.
Hey, Tyler.
Hey, Tyler.
Hey, Patrick. I'm hoping for a little more color on the Stoney Creek landfill. It seems obviously like a very interesting asset. First off, maybe how much is that landfill permitted to take and kind of what is its current intake?
Yeah, the site is basically permitted for 700,000-750,000 tons a year. I think one of the more compelling things, and going back to Luke's point of we've taken a conservative view on their earnings numbers that are presented here. They were going through an approval process to have that landfill permit expanded and extended, and through that process, what they did was back off on the fill rate. If you look at the numbers today, the intake was basically 275,000-300,000 tons a year for the last couple of years while 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. We will go to maximize price at that landfill and put in the highest price tons that we can.
I think there's a big opportunity for us specifically at that asset that'll provide incremental upside to what we put on the page.
Okay. Right. Lots of upside from utilization, but to be clear, that's not in that CAD 12.5 million of synergies.
No.
Okay. 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 gate rates are in the region?
Yes.
Okay. Just my last one on the CapEx. You got this 14-year expansion, or not you, but Terrapure got this 14-year expansion. To be clear, when we see expansions like that, they're usually a big cell build-out. Is that the case here? Is that contemplated in the CAD 30 million of CapEx?
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 seller's watch over the course of this year. By the time we close, that CapEx spend will be made. I think the interesting part about this expansion was they got a vertical expansion, not a horizontal expansion, so far. I think when you think about it again from a liner perspective, the cost to go up are a lot cheaper than going wide. Again, that'll 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%-6% CapEx. We've modeled in 7.5%. Again, just taking a very conservative view to take into consideration any unknowns.
Again, we feel very comfortable with the potential upside from the free cash flow because of that asset.
Yeah, Tyler, to your point on the cell expansion, I think there's sort of CAD 10 million- CAD 12 million this year, but as Patrick said, that's going to be substantially on prior owner's watch. Depending on close, a little bit of that may trickle into our spend. The go forward, that will be behind us, that sort of one-time cell build-out.
Okay, perfect. All right. Thanks, guys.
Our next question comes from Michael Hoffman from Stifel. Please go ahead with your question.
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 Competition Bureau Canada? Sort of when do you file? How long does it take? What are we looking at?
Our anticipation is we'll file by the end of the week. There's basically a two-week grace period for the Competition Bureau to review the file. There's basically a 45-day clock that starts ticking. In that 45 days, they can come back and ask for a second request. If they come back and ask for a second request, then that process generally extends for another 30-60 days. Generally at the end of the 30-60 days, post that initial 60 days, you'll have remedy solutions presented by the Competition Bureau if there are any issues. We don't anticipate any material issues here. I think there's enough other competition in the markets where we are. Yes, 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.
Given, I think, there's a lot of other files on the Competition Bureau's desk today. 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. We looked at all these issues in 2014, and we looked at all these issues in 2019. We were very well prepared, knowing if there'd be anything. Our view is there's very little that could be of concern for the Competition Bureau.
Okay. Then can you share with us, for modeling purposes, how should we split the sales and the EBITDA between solid waste and liquids of the CAD 375 million and the CAD 110 million?
Yeah, Michael, I'd say the CAD 375 million, again, this is the LTM number. Obviously, 2022, we'll guide at that time, is likely going to be something greater. CAD 375 million right now is split 1/3 of the revenue to solid and 2/3 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. At the EBITDA level, with that landfill, the EBITDA is higher margin. You're probably having on that solid revenue that's coming in is mid- to high-30s EBITDA margins, and that yields at the liquid business a low- to mid-20s. Again, we're saying that's a very conservative starting point, and we think that ramps up quite quickly from there.
Okay. That's helpful. Are there any things within your balance sheet that from a timing standpoint, where you might be able to couple the financing of this and a refinancing of the balance sheet and come out of this at a lower cost? Should we be aware of timing issues related to instrument restraints and things like that, restrictions?
Yeah. 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 for the adjusted free cash flow bridge. As always, the market continues to evolve, and there's a significant amount of products available to us. Yes, I would anticipate that interest costs are going to decrease, and our average coupons are going to decrease at the same time. We will look at a holistic financing package as we get closer to closing.
Okay. Just for clarification from my part, I was under the understanding that in Canada, MSW tip fees are actually pretty steep. They're CAD 60 to CAD 80 a ton. Your opportunity here is to improve the pricing in Canada. Your disposal costs are pretty attractive because you're coming into Michigan, that's why this is so attractive is you've got an opportunity to walk this up for in-Canada volume.
Yeah. That's right. I would say depending on what part of Canada you're in, disposal fees range from CAD 30 a ton to CAD 120 a ton. If we focus on the Ontario market, which is the MSW market is generally, I would say, controlled in Ontario by three parties, which is a company called Walker Group, 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 and MSW. They're not taking industrial waste, particularly with the proximity to Toronto. That's the benefit of this landfill. As you know, people look at disposal on a T& D basis. The lion's share of the volumes are in the GTA. I think when you look at the gate rates today for solid waste, generally range between CAD 30 and CAD 40 at the gate.
I think when you look at the industrial landfill rates today, those are moving up north of CAD 50 and probably somewhere between CAD 60-CAD 70 at the gate. Again, just because there's a scarcity value of opportunities to dispose of those materials, and this landfill happens to be permitted for those. 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 ADS transaction. We'll continue internalizing as much volume as we can into Michigan from our facilities, and then put the highest and best use tons into this landfill in Stoney Creek.
Okay. Since we've got you, could you give us a quick mid-quarter update on the state of business of existing GFL?
Yeah. We were through January and 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. Parts of Canada are opening up, but there's still Toronto and Montreal continue to take a perspective that locking people in their house is better than letting them out. As vaccines have slowly started to trickle in, and we're supposed to get a big ramp in vaccines here over the next six weeks. Our anticipation is that over the next eight weeks, things are going to start opening up. The hope is by June 1st, we're somewhat back to normal. I think from outside of that, everything is trending in line, and I think obviously, we don't see any surprises to the previous guidance that we put out.
Thank you very much.
Our next question comes from Hamzah Mazari from Jefferies. Please go ahead with your question.
Hey. Good morning. Thank you. My first question, Patrick, is 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? Do you have an updated view on non-core asset sales post this announcement?
Yeah. From my perspective, as most of you know, you follow the market. To get an asset of this quality at this price don't come along every day, I think it just speaks to the way that we are able to get deals done. 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 just were able to move quick. The seller had a reason that he wanted this business carved out because he had other plans for their battery business. We were able to move it and get it done quickly. I think on any financial or operating metric, like I said, from a complementary perspective, I don't think there's any asset that's any better that it could be in Canada.
When you look at those maps and literally their business is sitting on top of ours. Again, the opportunity for us to realize meaningful synergies, I think are exceptional. I think when you look at some of the recent trades in the private equity market, of environmental services business, solid waste businesses, these things are trading now sort of between 12.5x and 15x privately. There's been big trades, I think you look at the Covanta assets and the guidance that's been given on the environmental services business for Covanta, significantly higher multiple than what we're acquiring for this business. From a return on invested capital perspective, particularly with us not having to use any equity to finance this, given the multiple and the synergy opportunity here, I think for us as shareholders, it's very compelling.
From a return on invested capital perspective, on an unlevered basis and a levered basis, I think it's very good. I think when you look at the opportunity of what that looks like and what this will look like for us over the next three 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 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 seven years ago, and you see the forward projections of what the business is supposed to do. We looked at it again sort of two years ago, and then looking at it again today. Being able to have that sort of visibility and look back, I think also affords you a very unique sort of perspective in really understanding what the business is and what it is capable of. Any time 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.
Having that seven-year history with this business, I think really informs our view when we say this CAD 375 million and CAD 110 mill ion number starting is a highly conservative number that we can outperform. I think that's greatly substantiated and bolstered by that look-back perspective we have.
Got you. Very helpful. Just on the environmental side, 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 in environmental? What are they doing that you don't do in environmental today?
It's literally largely the same business. I think when you think about it, there's, again, we both do field services, we both do collection services, and we both have wastewater treatment facilities, and obviously solidification pads, et cetera. I think the business is, again, largely the same. From a service perspective, it's not as if we're going into any different sort of LOBs. Obviously, the organics business is a business we're in today. We operate similar businesses, obviously, so that's a business very well known to us. Then really just getting our hands on the landfill asset again is we're in the landfill business in other markets. This just gives us one in probably the largest market in Canada, which is 45 minutes from Toronto. Which is, again, I think very unique and positions us very well for the next number of years.
Just lastly, does this change view of further M&A? Your leverage ticks up a little bit, but obviously synergies are low and numbers seem very conservative. Maybe the leverage doesn't tick up, but is there a view on more M&A after this?
Like we said on the last call, we had a number of smaller opportunities under LOI. By and large, the lion's share of those are in solid waste. 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 is the CAD 1 million-CAD 5 million EBITDA businesses that tuck nicely into our solid waste platform in Canada and in the U.S. 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. This doesn't really change anything.
Sort of different work stream, and truthfully, a different team that's going to be managing the integration of this business.
Hamzah, on the leverage implications, as we said, even at the WCA, if we're performing how we are going to end the year at sort of 4.6. If you roll that forward, you can still execute on the M&A pipeline through all of 2022, acquiring the sort of CAD 40 million-CAD 60 million of EBITDA, paying 7.5x , and you still de-lever sort of 25-3 0 basis points. The leverage impact, we are 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. The de-leveraging, even when executing on the M&A pipeline, the model still de-levers, 25, 30 basis points through 2022.
Great. Thank you so much.
Thanks, Hamzah.
Our next question comes from Walter Spracklin from RBC Capital Markets. Please go ahead with your question.
Yeah, thanks very much. Good morning, everyone.
Morning, Walter.
First question just on the speed of synergies. I think the CAD 12.5 million that you'd indicated are primarily administrative, correct me if I'm wrong, but those can come in pretty quickly. 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, eventually?
Yeah, I think a realistic timeframe is probably 18 months, to get everything sort of ticked and tied and tucked in, I think is probably a realistic timing expectation to get sort of fully executed on every one of those opportunities that we see today.
The CAD 12.5 million can happen pretty quickly, though?
Oh, the CAD 12.5 million going to happen, yeah, very quickly.
Yeah. Okay. This was, you mentioned two-thirds liquid, but obviously will come down as Stoney Creek goes up, but just curious as to whether the focus on liquid waste is. It's a market you're already in in Canada, and you're buying a competitor here. When you look at 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 then when 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 to really expand, and be able to sort of integrate further tons into those landfills where we have fixed cost bases, 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.
Our next question comes from Rupert Merer from National Bank. Please go ahead with your question.
Good morning, guys. A follow-up on the projected CapEx rate. Can you give us some color on how the age of the Terrapure fleet compares with yours, and maybe the age of their facilities versus your facilities?
Yeah, 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. Liquid waste, fewer actual power units on the collection side, and then you have sort of tankers and other trailers that you use for collecting wastewaters. Facilities, I'd say a bit of a mixed bag. As we said, if you look at the maps, there's going to be opportunity for consolidation, particularly on non-permitted sites. Just regular hauling yards, where maybe you might need some CapEx maintenance dollars. There'll be a sort of efficiency by consolidating some of those. On balance, the fleet where the majority of the dollars are, I'd say middle of the fairway.
Okay, great. If you look at the EBITDA margins on slide six, it shows slightly better EBITDA margins for Terrapure with synergy. It looks like the margins may be about the same as yours before the synergy. If you compare Terrapure's operations to GFL's on an apples-to-apples basis, the various business segments, are there any noticeable differences in the business model in terms of your gross margins, returns on capital, G&A?
No. What I'd say, if you break it apart and you look at their landfill, you look at their organics, you look at their collection, waste processing, I think each of those service lines have a very comparable margin profile to the equivalent in the GFL world. Landfill, very high EBITDA margin, organics, good EBITDA margin, collection, sort of lower. I think that looks all comparable. I think part of the CAD 12.5 million 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. 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 two together and the efficiencies in that, there's opportunity to go above where it is today.
I wouldn't say there's any structural differences between their collection and post-collection and the margin thereof versus what we have.
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 were able to manage through the pandemic and what the business might look like once we get through the pandemic on a rebound?
Yeah. Over the years, to 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, and we saw them in 2018, and now we're seeing how the actual sort of played out. I think by and large, the strategy and that the guys at Birch Hill and Terrapure have employed has worked out very well. They've grown a very successful business across Canada. It's performed well, margin expansion and the other upside opportunities that were highlighted in CIMs from four or five years ago, the guys executed on. I think again, having that look back very sort of helpful. Look, COVID in Canada had significant impact.
You look at our businesses, down sort of high single digits at organic volume, I think Terrapure was no different, just as you had the sort of shutdowns of industrial and commercial customers, car dealerships, et cetera. Similar to what we're seeing, what Patrick articulated the first 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 and the volume coming back. As we said before, I mean, 2019 pre-COVID was a CAD 410 million 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. 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.
I think the team was faced with a tough year in 2020, like everyone else was. Through cost control and other measures, did a great job managing through. 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 attractiveness on the face of the math that you see on the page today.
Right. I'll leave it there. Congratulations.
Thanks, Rupert.
Once again, if you would like to ask a question, please press star and one. Our next question comes from Mark Neville from Scotiabank. Please go ahead with your question.
Hey, good morning, guys.
Hey, Mark.
Just curious, the CAD 410 million of revenues, would that have been peak revenue for this business?
There's been some M&A through 2017 and 2018, so it's sort of hard. Yeah, I think that if you look the year before, it was a little bit less than that.
Okay. I guess to your point, you've looked at this a few times. I'm just curious sort of how it's evolved versus, and again, you touched on this, but how it's evolved, how much M&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.
Yeah. Yeah. I think it's evolved. Again, 2014 was a carve out from Newalta, which was complicated. Again, battery business was interesting, but not something I think that we were gonna be highly focused on. 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 a pretty low value to the battery business, not because it was not a good business. It's just from our perspective, it just didn't really fit with what we did. Again, the business evolved under Birch Hill's ownership significantly. They did a lot of great things. Todd Moser and Ryan Reid, who took that business, have done a lot with it over the number of years.
When you look at what it was in 2014 and what it was in 2019 and what it is today, it's a significantly different business. They've done a bunch of M&A over the years. I think when you look at one of the major acquisitions they did was a company called Envirosystems, which was the business that literally had a significant amount of market share in Nova Scotia, Newfoundland, and New Brunswick. They bought out their largest sort of battery recycler in Ontario, which is a company called Tonolli. The battery business continued growing over the years, and then they had done a bunch of smaller tuck-in M&A on the environmental services and the organic side, because previously they weren't in those lines of business. I think they did a lot of good things with it.
I think from our perspective, we got I would say the Bill Belichick and Tom Brady team in our business. 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. I think that'll 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 and over-delivering, we will do that, and the team will do that. Listen, I know what the internal conversations have been with the team and everyone's extremely excited about it and has lots of ideas. I think over time, this is going to be a winner for us.
We're starting at a great point from a purchase price perspective. If you buy right, you generally end right. I think layering all those together, particularly with our know-how in Canada, we're going to be very well-positioned here.
Good. 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. Just to clarify, would that include sort of ramping up the volumes into Stoney Creek?
Yes.
All right. Thanks, guys. Thanks for the time and congratulations.
Thanks, Mark.
Thanks, Mark.
Our next question comes from Tim James from TD Securities. Please go ahead with your question.
Thanks. Good morning, everyone.
Good morning.
Congratulations on the transaction. Just want to go back to the Stoney Creek landfill for a minute. Does acquiring that asset sort of open up the doors or maybe facilitate more tuck-in in the kind of Ontario or central Canada region in particular? I mean, does it make certain M&A more attractive because you now own that asset?
I think it's just from a synergy perspective, the more you can internalize clearly makes things, I would say, more interesting. Yes, I think that holds 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 processes of some of our liquid waste business, the ability to internalize more tons and internalize more tons directly from our existing customer base. I think you look at 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've thought.
Okay. Thank you. 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 CAD 12.5 million 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 the total dollars of opportunity, the revenue or cost synergies 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 synergy opportunity on eastern Canada, really the Maritimes, is going to be largely around cross-selling our solid waste business, around the Terrapure customers. We already may do 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. I think from a cost perspective and a cost synergy perspective and facility consolidations, et cetera, that's largely going to come in central Canada and western Canada.
Okay, great. Thank you very much.
Thanks, Tim. Thank you, everyone. Oh, sorry.
No, I was just going to turn the floor back over to you, sir. Please go ahead with closing remarks.
Thank you everyone for joining the call, and we look forward to speaking to everyone after Q1.
Ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining today's presentation. You may now disconnect your lines.