GFL Environmental Inc. has entered into a definitive agreement with funds managed by affiliates of Apollo and BC Partners for the sale of its Environmental Services business for an enterprise value of $8.0 billion. GFL will retain a $1.7 billion equity interest in the Environmental Services business and expects to realize cash proceeds from the transaction of approximately $6.2 billion net of the retained equity and taxes.
GFL intends to use up to $3.75 billion of the net proceeds from the transaction to repay debt, making available up to $2.25 billion for the repurchase of GFL shares, subject to market conditions, and the balance for transaction fees and general corporate purposes. Net Leverage, pro forma for the planned use of proceeds, is expected to be 3.0x.
“The sale of our Environmental Services business at an enterprise value of $8.0 billion is substantially above our initial expectations and is a testament to the quality of the business that we have built,” said Patrick Dovigi, Founder and chief executive officer of GFL. “The transaction will allow us to materially delever our balance sheet, which will accelerate our path to an investment grade credit rating. A deleveraged balance sheet will provide ultimate financial flexibility to deploy incremental capital into organic growth initiatives and solid waste M&A and allow for a greater return of capital to shareholders through opportunistic share repurchases and dividend increases, while maintaining a targeted Net Leverage in the low 3’s.”
Pursuant to the transaction agreement, GFL will retain a 44 percent equity interest in the Environmental Services business and the Apollo Funds and BC Funds will each hold a 28 percent equity interest. The transaction is expected to close in the first quarter of 2025 and is subject to certain customary closing conditions. The transaction is not subject to any financing conditions.
GFL’s board of directors (interested directors having recused themselves) unanimously approved the transaction upon the recommendation of a special committee comprised solely of independent and disinterested directors. In arriving at its unanimous recommendation that the transaction is in the best interests of the company, the special committee considered several factors, including among other things, a fairness opinion delivered to it by its independent financial advisor, Canaccord Genuity Corp., that the consideration to be received under the Transaction is fair to the Company from a financial point of view.
Published February 2025
