I thought we'd just do a quick overview of SECURE because I'm sure a lot of you haven't had a chance to know what the company's all about. But there's been a big pivot in the last 18 months, so some of the numbers you see in the Gabelli handout have changed quite dramatically. So let's start it off with just you know, our roots going back to 2007. I started the company with five others, and you know, reducing our environmental impact really was the forefront of our business right from day one. And you know, it's all about you know, we do a lot of processing and disposing of liquid solid waste. You know, we recover that oil. That's crude oil, not engine oil, and then obviously recycling the waste materials. So.
But the big transaction I think that got everybody's attention here was, we had merged with a company called Tervita. Obviously, they had bought a company called Newalta, so we went from three competitors down to two. And then we merged with them to have one competitor in Western Canada. Our equivalent of the FTC fought that and didn't have to divest everything they wanted us to divest. So we ended up divesting these assets that represented about 25% of the market in the waste handling. And so, of all the companies that came in with the overall best fit and the right price was Waste Connections. And that's what Joe alluded to earlier here. You know, they paid up for it at a 7.5x multiple on a trailing 12 basis. And obviously at the, you know, accretive to us.
But I think it also brings in a competitor, and you can see from Waste Connections history that they are a good competitor, and they are focused on margin improvement and price improvement. So. You know, it was a forced sale, so we think we're still undervalued at even at a 7.5 multiple, and we'll talk a little bit about why we think we're undervalued. Looking at our map here in Western Canada, we do have some facilities in North Dakota. It's 75 locations. About 80%-85% of that is recurring revenue, non-cyclical. And it's infrastructure with high barriers to entry. So. A lot of our network is certainly high. It's large capital that needs to be put to work. There's permits. There's also regulatory standards that have to be met.
So it's a great business, and it's very difficult for a competitor, a new competitor, to come into the space. So let's talk about the waste management side of it. As you can see, 70% is the waste management, and our energy infrastructure is really a smaller portion of that. And then, when you look at the waste management, we break it down into, you know, the processing side, the industrial landfills, the metals, the metal recycling industrials, and then specialty chemicals. So what you saw here over the last 24 months is we sold most of our lower margin, more cyclical oilfield services, and then we're left with these two segments, which, you know, there's a lot of high margin, but also, more importantly, a lot of discretionary free cash flow.
So looking at this division, you know, we talked about the processing recovery cycle. Again, high barriers to entry. It's critical infrastructure. Most of our customers can do little bits and pieces, but nobody has quite the same infrastructure, so they do outsource a lot of this. And when you look at the volume numbers, you know, on the water side, it's growing about 7% year-over-year. The waste processing is in that 1%-2%. Our utilization at our fixed facilities is only at 60%-65%. So as the volume starts to increase, we don't have to necessarily go out and spend new capital. And so, you know, there's a bunch of new environmental regulations coming in that help this side of the business. Same with, you know, we feed into our landfills. You're all familiar with the landfills.
We have one hazardous landfill. The rest are non-haz. But this business is growing about 2%-3% per year, and certainly, some of the new regulations coming in, I think, will drive that higher. But it takes time as our customers digest some of these new regulations, and certainly, the trend line is looking like it's going in the right direction. And then, finally, with the metal recycling side of the business, you know, it's probably growing closer to that 10%-15% per year. We think there's a great roll-up strategy here from an M&A, so we don't put the actual numbers in terms of the volume and tons that we process. But, you know, we've got a great business that's really been optimized. Tervita wasn't. It wasn't running it very well.
That's what we've been focusing on, is getting it optimized here in the last 24 months. But now we're in an expansion mode, and some of that's gonna be organic, and some of that's gonna be M&A. And then, finally, with specialty chemicals, think about our chemical businesses. We need the chemicals to process a lot of this waste, but we also sell chemicals to our producers who use it on the production side. And so it's a great complement. It probably represents about 10%, like I said, of our overall EBITDA on that segment. So not huge, but it definitely complements what we do. So looking at the energy infrastructure, think about our facilities. We're recovering all that crude oil. But our customers also want to bring in oil over and above what we recover from the waste.
Having that infrastructure, that fixed cost. It's very easy for us to add these volumes. And so. You know, we believe we're in that 3%-5% year-over-year increase in volumes coming in. And there's three big gathering pipelines, and then some smaller feeder pipelines. Most of what we've built and created with this in terms of this infrastructure has all come with take-or-pay contracts. Typically, they're 7-12 years. And so we have guaranteed minimum volumes. And typically, you know, we're getting somewhere in the range of a 15%-20% after-tax return on investment. So. You know, it's a great business. We like it, and it's very complementary to as we recover that oil. So let's take a look just at the numbers. We pulled this slide together last year, just showing you.
When, you know, when you look at our peers, Waste Connections, Clean Harbors, and GFL, you can see that SECURE, and all five of these benchmarks are at the top. So, you know, that's looking at 2023. And then what we also wanted to show you then, one of the questions we get from some of our new investors is, well, how does WTI, or the price of oil, impact your business? And so you can see on there the yellow line. You know, when oil went to $110 a barrel, and all the way back down to $70 a barrel. You can see our revenue continuing to grow. It's not, you know, the small amount of cyclical part of the business really doesn't impact our revenue and or our margins. So it's a great chart to kind of reinforce.
What we're talking about, and we've, you know, tried to show you over the last 8 quarters. So really, the punchline here is, when you look at our peers, you know, we're trading at 6.5x. You know, we've got same store sales growth. We've got, we're buying back shares. We bought back 7% last year. We have an NCIB in place right now. We've bought back probably. We're allowed up to 8%, and we've probably. You know, in the last three months, we've bought back 65% of what we're allowed. We've got some M&A growth that we talked about, and then, obviously, we've got some organic growth that we'll go into more detail. So. And then, finally, we'll finish it off with where the rubber hits the road. This is, we're all about free cash flow.
So what this shows you with our guidance, you know, in that CAD 450 million for adjusted EBITDA in 2024. You take off for sustaining capital, lease payments, our cash taxes, cash interest. And we're somewhere closer to CAD 300 million too. You know, again, we have different uses for that, and we have four or five levers on how we're gonna optimize, not only that, but obviously we're debt free today with the divestiture. So with that, I'm gonna turn it back to Michael. Leave that with you to the questions.
Perfect. That was a great overview. Thank you. So I think, to begin, I'd like to start talking about the Tervita divestiture. I think that's been a really transformational opportunity for you. And, I'd like to dig more into that.
Sure. You know, the Tervita had a business that, you know. It was a great business, but they had a lot of debt. So, when the pandemic hit, their CEO came over to see me and said, I think we should put the two companies together. You know, it. When you've got two similar size companies trying to pull something together like that's. It's not easy. And you have to push the egos aside. You know, at the end of the day, we felt we had a better management team. We felt that we had less debt and probably a higher true free cash flow business than they did. So it came out. It was a share exchange. It was 52-48, and we split the board up four-four. We knew there was huge synergies.
There was CAD 75 million a year in annual synergies. And probably came in at CAD 80 million. So it's one of the few times where mergers actually beat their synergy numbers. And so, you know, at the time. We thought. You know, combined, we'd be about CAD 350 million EBITDA. You add your CAD 75 million of synergies. You're at CAD 425 million. And. You know, pre-divestiture, we came in at CAD 600 million. Over the last three years, so. Pretty successful transaction all the way through.
Definitely. And I wanna talk about what was divested to Waste Connections, because the proceeds of that has really been a transformational dynamic for you as well. And I think I also wanna talk about the multiple there, because the multiple of 7.5x is higher than that of the whole company. So what I guess, what does that mean for the rest of your very attractive assets?
Yeah, great question. I mean, you know, one of the questions I got from one of the investors this morning was that, you know, were those assets different than what you have in the network today? And the quick answer was it was apples to apples. So the mix that Waste Connections got, and we divested is pretty similar to what we have. Albeit, you know, we still have 75% market share versus their 25% market share. So, you know, I think the assets themselves have the ability to grow like we talked about. A lot of them are running in that 60%-65% utilization. And I think that, you know, we've essentially paid down all of our debt, you know, so we have literally CAD 1 billion to put to work here. And so.
You'll, you know, you've seen us quite aggressive on the share buyback. You know, we pay a dividend somewhere in that CAD 100 million a year range, about a 3.5% yield. And so we've got some M&A opportunities, not huge M&A. They're, you know, they're tuck-in type M&A. We've got organic growth capital could get as high as CAD 150 million this year. So we've got lots of options. And so I think what you'll see is pull all four or five levers and optimize that over the next 18 months. We're pretty comfortable with that type of recurring cash flow to be somewhere a debt to EBITDA ratio of 2-2.5 times. And so you'll probably see us get back into that range over the next 24-36 months.
Excellent. That's really insightful. I wanna dive a little deeper into the waste management business, and you had a good image on the screen, detailing how it's impacted by the price of WTI, or it's really not. It's stable. Maybe you could explain how the dynamics work there.
Yeah, you know, you think about in Western Canada, and then not all of our revenue is coming from the energy side. We do have, you know, revenue coming from some of the mines, some of the petrochemicals, some of the manufacturing segments as well. But you know, when you think about oil and gas being produced in Western Canada, there's byproducts. And you know, a lot of it can be water. A lot of it can be certainly sand and sediment, and certainly there's lots of, you know, just solids that need to be dealt with. And having that specialty chemical business, because it comes in altogether sometimes, having, you know, a combination of heat, chemical, and G-force, a centrifuge. We're able to separate that out. So you're able to.
You know, in some cases, dispose or recycle of that water. You're able to truck those solids to your landfills, and then that. You know, expensive, recovered oil can be shipped to market, and you get credit for that in some cases. Depending on the concentration oil, that oil would get credited to the customer. So there's an incentive for that customer to bring that waste to us. So. But it's day to day production that's been going on for years and years, and. As the drilling increases are slowed slows down, it just doesn't have as big an impact as you would have seen. When you're doing something like Joe described this morning with, say, a pure drilling waste. This is more day to day production.
Excellent. That's really helpful. I guess, you know, we talked a lot this morning about price versus volume. I guess, as it relates to that, what are you seeing in Western Canada?
Yeah, I mean, we have the fortune now of going from having 100% the market to 75% and two competitors. You know, you would have seen us increase our prices in 2022 and 2023. You know, we've probably been able, and again, I like the way Waste Connections thinks is it's the differential. It's not the overall price that we're increasing, and so we've been able to probably grab about 2%-3% of the operating margin. So, you know, we kind of went from that 33%-36% to overall EBITDA corporate margins on price, and a combination a little bit more of volume coming in as well.
I guess, given the elevated, you know, crude price or WTI prices, you know, is something would you expect more projects in Canada to be a tailwind, or is that something that would have a significant impact, or?
Yeah. So there's two big monumental things happening in Western Canada. And that's one is a natural gas line going to the West Coast that's gonna feed a 2.5 Bcf LNG plant, and so. There needs they're gonna, you know, the producers have contracted it out fully. So there's gonna be more production coming on the rich liquid gas that needs to feed that LNG terminal. The other thing that's happening right now, they're taking a brand new pipeline to the West Coast, oil pipeline. It's an incremental 600,000 barrels a day, and again that is gonna get filled up here over the next five years in terms of incremental production. So there's some huge tailwinds in terms of there's just gonna be more byproducts.
It's just like the population growing for garbage. There's a huge amount of tailwinds that, the day to day production's gonna increase.
Excellent. I guess that'd be a good segue to maybe discuss the energy infrastructure segment and some of the dynamics you're seeing there.
Yeah. What we love about that business is, you know, we have fixed costs in terms of having to ship, you know, the crude to market. We don't take any risk on that crude. It's not like we're buying WTI, and we're hoping it goes up. It's really a lot of—you'll see, and you actually see it in our income statements, which drives, I'm sure a lot of you nuts, is you'll see this big growth up number. And then you see that coming out on our expense line. So it's a buy sell type arrangement. We have in Canada IFRS that forces us to show that as a growth, and then a net. And so, but we're not taking any risk on the commodity, and so.
You know, definitely. You know, the tailwinds we just talked about, you know, obviously we get a little bit more of a windfall in terms of the oil that we do recover. And we keep to our own account. That's gonna, you know, obviously go up and help the bottom line. But you know, the one trend, and I'm sure you hear about it sometimes down in the Permian in Texas, is that you see in Western Canada as well is there's just more and more water to either be disposed or recycled, and that trend. You know, I've been in the business since 1994. That trend has been going on since 1994. So, you know, you'll see a lot more water infrastructure.
That needs to be built, and certainly there might be some situations where the producers that built their water infrastructure will outsource it to ourselves. So there's all kinds of opportunities around water as well.
Excellent. And, you know, you alluded to your capital allocation plan, you know, paying down all your debt, share buybacks, and the potential to lever up for M&A. I guess what would be a potential area of interest? Would it be something like that, you know, energy infrastructure, or you know, disposal assets, or I guess, and maybe what region would you be looking as well?
Yeah, I mean, we've been kind of, if you think about our last three years. Big merger. Optimization, selling off the oilfield services. And then now, the divestiture. We haven't had a lot of time to spend on offense. And so I think from an M&A point of view. We really like the metal recycling business. We really like the, some of the waste transfer industrial waste that we have. And we also have some small tuck-in acquisitions I think we can do around. Some of these treatment and disposal, whether it's coming from the producer, or whether it's coming from some small mom-and-pops. But obviously, this is all mostly focused on Western Canada, because that's what we know best. There's some opportunities in North Dakota.
Then I think over the next couple of years, as we have more time to research what's available in the U.S. What's our fit? You know what can we bring our skill set that's complementary to us? I think then you might see us do something in the U.S.
Excellent. You know, one question I wanna ask is, you know, given the, you know, typical multiple of a unit, a U.S. waste management company versus what you guys are getting. Would it make sense to potentially split, or spin off the energy infrastructure business and separate it from the waste management business? To realize that underlying value, is that something, you know, you would consider maybe in the future, or.
I don't think you, you know, I'll never say never say never, but. You know, if, when you think about. You know, a CAD 50 million facility. That incorporates five, six, seven, eight services all in one. You have a certain amount of fixed costs, and so. Trying to segregate that, that portion out of it. I don't think makes economic sense. I mean, we do have some gathering pipelines where there isn't the processing there that. Might be a little bit of an easier fit to divest, but. We've got CAD 1 billion to play with, right? Last thing we're thinking about is divestitures. But if you ask me in five years, maybe that's a different. Different, cup of tea.
So I just wanna turn to the audience and see if there's any questions. Okay, perfect. You know, I guess one of the focuses over the last couple of years has just been the significant cost inflation. I guess where have you seen that most, and has that subsided?
I think it has come down. I don't think it's gone away. You know, I would say that on the wages front, you know, you're still seeing 4%-5% increases. I think, you know. You're, you know, we spend in their processing. We spend a lot on natural gas, which has come down. That's a positive. Our costs have stabilized. You know, I think chemicals we use in our process are gonna start going up here again. So probably we've come down, but I still think we've got a core inflation at most of our facilities year-over-year in that 4%-5% range. So I would expect our prices will change and make sure that we cover that, and then some going into this summer and the fall.
Excellent. You know, I wanna talk a little bit about the competitive dynamics in Western Canada. I mean. Obviously, the divestiture. Sure. You guys have a large market share. I guess maybe you could give us some insight on what the market is like, over there.
Yeah. So I mean, on one hand, you know, I describe, you know, the liquid in the solid waste ourselves having about 75% market share. Waste Connections somewhere in that 20%-24%, and then there's some small few independent players out there. North Dakota, I would say we have about 40% market share, and then a lot of it's very fragmented the rest of the market. There is no big second player. Having said that, the producers also have some of their own infrastructure, but this is more in the oil sands. So outside of the oil sands, I think ourselves and Waste Connections will continue to dominate the market, and obviously with that comes pricing power.
Excellent. So, you know, you alluded to it. You guys did this large acquisition. You found you got this great windfall of CAD 1 billion. To excess, to deploy. I guess five years from now, what I guess, what, where do you see SECURE heading? What, you know, what, what's the plan?
Well, I think, you know, the great network that we have today in having the available capacity. I think, you know, I think we can grow our same store sales in that 5% per year, you know, compounded over the next five years. I think we can, you know, have some sort of pricing power associated with that. I think, you know, I think we can continue to, you know, every year is gonna be a little lumpy in terms of organic growth, but I think we can probably spend up to CAD 150 million per year on our organic growth. And then the M&A, and you know, the M&A is the wild card. I think there's lots in the hopper right now. There's probably CAD 300 million-CAD 400 million worth of opportunities.
Outside of that, I think, you know, give us a couple of years and probably have a little bit more defined M&A.
Excellent. I just wanna throw one last question in. You know, you'll be retiring as CEO in May. I guess what is the next phase of leadership look like under Allen?
Well, one thing that I've always recognized, right from day one, is you surround yourself with great people, and so. I have the luxury where Allen, who's our incoming CEO, has been with us 17 years, and he's gone from VP of finance to CFO, corporate development, COO, and now president, and so knows the business inside out, and I don't have one doubt that he can take it to the next level as the CEO. Corey has been with us 17 years as well. So, great succession plan, I think, you know, I'll be going on the board as vice chair, and certainly helping out where I can, and making sure that we take it to the next level with Allen and Corey.
Excellent. We're really excited to have you today. This was really insightful and informative. So thank you, and that we look forward to having maybe Allen back next year.
Okay. Thank you.