GFL sells environmental division in $8bn PE deal

March 2025 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

March 2025 Issue

In a transaction valued at $8bn, Canadian waste management company GFL Environmental is to sell its environmental services business to private equity (PE) firms Apollo and BC Partners.

GFL will retain a $1.18bn equity stake in the business, which contributed approximately 23 percent of its total revenue in the third quarter. Apollo and BC Partners will each hold a 28 percent share.

Under the terms of the definitive agreement, GFL will use up to $3.75bn of the net proceeds from the transaction to repay debt, making available up to $2.25bn for the repurchase of GFL shares, subject to market conditions, and the balance for transaction fees and general corporate purposes.

Headquartered in Vaughan, Ontario and with a workforce of more than 20,000, GFL is the fourth largest diversified environmental services company in North America. It provides a comprehensive line of solid waste management, liquid waste management and soil remediation services through its platform of facilities throughout Canada and in more than half of the US states.

“The transaction allows us to monetise the environmental services business in a tax efficient manner while retaining an equity interest that will allow us to participate in what we expect to be continued value creation from these high-quality assets,” said Patrick Dovigi, founder and chief executive of GFL. “In addition, GFL will maintain an option, not an obligation, to repurchase the environmental services business within five years of closing.”

“After a long, robust and highly competitive process, we are excited to have selected the Apollo Funds and BC Funds to partner with on this transaction,” continued Mr Dovigi. “We have a longstanding relationship with BC Partners and look forward to working with Apollo.”

GFL’s board of directors has unanimously approved the transaction upon the recommendation of a special committee comprised solely of independent and disinterested directors.

“We believe this transaction will provide the environmental services business with greater flexibility to pursue organic and inorganic growth opportunities as an independent business, while also taking advantage of the strategic, value-added resources and structuring capability of the Apollo platform,” said Craig Horton, a partner at Apollo. This is a great example of partnership capital from the Apollo Funds, including our hybrid value and Infrastructure strategies.”

Serving as financial advisers to GFL are Brown, Gibbons, Lang & Company Securities, Inc. and JP Morgan Securities LLC, with Latham & Watkins LLP and Stikeman Elliott LLP serving as legal counsel. Canaccord Genuity Corp. served as independent financial adviser and Cassels Brock & Blackwell LLP served as legal counsel to the special committee.

Serving as legal counsel to Apollo and BC Partners in the US are Sidley Austin and Kirkland & Ellis LLP respectively. Osler, Hoskin & Harcourt LLP served as legal counsel to the Apollo Funds and BC Partners in Canada.

The transaction, which is not subject to any financing condition, is expected to close in the first quarter of 2025 and is subject to certain customary closing conditions.

Paolo Notarnicola, a partner at BC Partners, concluded: “Going forward, we are excited about the growth potential of this business, which is best placed to capitalise on the significant consolidation opportunity in the environmental services industry, including further expansion in the US.”

Fraser Tennant