Canadian waste management company GFL Environmental Inc. is selling a majority stake in its environmental services division to Apollo Global Management and BC Partners for $6.2 billion. The funds will be used to reduce GFL's debt and for share repurchases.
Canadian waste management giant GFL Environmental Inc. is selling a majority stake in its environmental services to two private equity firms, Apollo Global Management and BC Partners, delivering $6.2-billion in cash proceeds. GFL’s environmental services division offers liquid waste management and soil remediation services, among other things, and the company launched an auction for the division in mid-2024.
The business is appealing to private equity buyers because it has predictable revenues and can be considered an infrastructure asset. GFL itself expanded under multiple rounds of private equity owners, including Ontario Teachers’ Pension Plan, before going public in March, 2020. The deal ascribes an $8-billion enterprise value to GFL’s environmental services divisions, and after the deal closes Apollo and BC Partners will each own 28-per-cent stakes in it, and GFL will hold the remaining 44 per cent. GFL values its equity stake at $1.7-billion. GFL will use up to $3.75-billion of the cash proceeds to pay down its $9.5-billion debt load, and will use the remaining $2.25-billion for share repurchases, and general corporate purposes. Apollo is a new business partner for GFL, while BC Partners is already GFL’s largest shareholder – and therefore already has some ownership of the division. Under the terms of the transaction, GFL has the option, but not an obligation, to repurchase the environmental services business within five years. GFL put the division up for auction after investors grew nervous about its debt load
WASTE MANAGEMENT PRIVATE EQUITY DEBT REDUCTION SHARE REPURCHASES ENVIRONMENTAL SERVICES
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