GFL Environmental is selling 56% of its liquid waste management and soil remediation division to private equity firms Apollo Global Management and BC Partners for $6.2 billion. While this will allow GFL to pay down debt, the deal also involves adding $4 billion in new debt to the business, which GFL will remain a 44% owner of. The complex transaction, which includes a payment-in-kind (PIK) note, makes it difficult to assess the long-term benefits for GFL.
to pay down debt, but the complex transaction, which includes adding new debt, makes it hard to assess how much the waste management giant will ultimately benefit.
GFL’s minority stake in the business will sit on its balance sheet as a single-line item, which means investors will only see the value of GFL’s equity position. All cash flow and financial details will be kept private. After the transaction closes, the environmental services business will have a debt load – excluding the PIK note – that amounts to 5.5-to-six times its earnings before interest, taxes, depreciation and amortization, Mr. Dovigi said. That is similar to GFL’s current debt level, which is what prompted the company to sell its environmental services division to begin with.
GFL Waste Management Private Equity Debt Recapitalization
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