GFL Environmental Strikes $8 Billion Deal for Environmental Services Sale
Deal News | Jan 07, 2025 | Apollo
GFL Environmental Inc., a major waste management company based in Vaughan, Ontario, has announced the sale of its Environmental Services division to Apollo Global Management and BC Partners for $8 billion. This move allows GFL to materially reduce its debt and increase shareholder returns via share repurchases. The transaction, which has received board approval, is designed to enhance GFL’s financial flexibility and improve its credit rating. By selling the Environmental Services business, GFL expects to leverage the capital gained to focus on organic growth, potential acquisitions in the solid waste market, and other shareholder return strategies. Apollo and BC Partners each acquire a 28% equity stake, while GFL retains a 44% stake, allowing continued participation in potential growth while reducing leverage to 3x. GFL seeks to capitalize on new opportunities in growth markets of its remnant solid waste and liquid waste operations. Key advisors in the transaction included J.P. Morgan and legal counsel from Stikeman Elliott LLP and Latham & Watkins LLP.
Sectors
- Environmental Services
- Private Equity
- Corporate Finance
Geography
- Canada – GFL Environmental is headquartered in Vaughan, Ontario, marking a significant Canadian corporate transaction.
- United States – GFL Environmental operates extensively across the U.S., and both Apollo and BC Partners have significant operations and investments in the U.S.
Industry
- Environmental Services – The article discusses the sale of GFL's Environmental Services business, which operates in waste management and environmental solutions.
- Private Equity – Apollo and BC Partners, both leading private equity firms, are involved in acquiring a significant stake in the Environmental Services business.
- Corporate Finance – The transaction involves complex financial structuring, advising, and restructuring of capital and leverage.
Financials
- $8.0 billion – Enterprise value of GFL's Environmental Services business being sold.
- $6.2 billion – Cash proceeds expected from the transaction after accounting for retained equity and taxes.
- $3.75 billion – Portion of the transaction proceeds to be used to repay debt.
- $2.25 billion – Amount available for opportunistic share repurchases by GFL.
- $1.7 billion – Retained equity interest that GFL will hold in the Environmental Services business.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| GFL Environmental Inc. | Target Company/Seller | Company | A leading North American diversified environmental services company based in Vaughan, Ontario. |
| Apollo Global Management | Buyer/Investor | Company | A global alternative investment firm involved in acquiring a stake in GFL's Environmental Services business. |
| BC Partners | Buyer/Investor | Company | An international investment firm also acquiring a stake in GFL's Environmental Services unit. |
| Patrick Dovigi | CEO & Founder of GFL | Person | The Chief Executive Officer of GFL Environmental, providing strategic direction for the transaction. |
| J.P. Morgan Securities LLC | Financial Advisor | Company | Served as one of the financial advisors for GFL in the transaction. |
| Latham & Watkins LLP | Legal Advisor | Company | Provided legal counsel to GFL in the transaction. |
| Stikeman Elliott LLP | Legal Advisor | Company | Served as legal counsel to GFL Environmental. |
| Canaccord Genuity Corp. | Independent Financial Advisor | Company | Advised the Special Committee of GFL's board with a fairness opinion on the transaction. |