Newsworthy

Municipal/IC&I

GFL Environmental sells majority stake in Environmental Services business

GFL Environmental Inc., headquartered in Vaughan, Ontario, has entered into a definitive agreement with funds managed by affiliates of Apollo and BC Partners to sell a majority stake in its Environmental Services business for an enterprise value of CA$8 billion ($5.6 billion) which significantly exceeded management’s initial expectations, according to the company.

GFL will retain a CA$1.7 billion ($1.2 billion) equity interest in the Environmental Services business, which will allow for future value accretion, and the company expects to realize cash proceeds from the transaction of about CA$6.2 billion ($4.3 billion) net of the retained equity and taxes.

Under the terms of the agreement, which is outlined in a Jan. 7 investor update, GFL will retain a 44 percent equity interest in the Environmental Services business, and the Apollo Funds and BC Funds each will hold a 28 percent equity interest.

The deal is expected to close in the first quarter of 2025 and is subject to certain customary closing conditions but not to financing conditions.

The company’s strategic rationale for the sale includes its ability to accelerate balance sheet deleveraging to investment grade levels, the opportunity for share repurchase and future dividend increases, reignition of its M&A engine and allowance for incremental organic growth investments in core solid waste with immaterial impact to leverage and the maintenance of synergies between GFL’s Environmental Services and Solid Waste businesses with ability to cross-sell offerings.

GFL’s board of directors (with interested directors having recused themselves) unanimously approved the transaction upon the recommendation of a special committee comprised solely of independent and disinterested directors, according to the company. 

GFL says it intends to use up to CA$3.75 billion ($2.61 billion) of the net proceeds from the deal to repay debt, making up to CA$2.25 billion ($1.57 billion) available for repurchasing 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 3X, according to the company.

In early November 2024, GFL’s stock rose 2.5 percent after a report that initial interest and bids for its environmental business were greater than expected.

As reported by CTFN, a merger and acquisition and regulatory reporting news agency, more than 25 parties showed interest in the environmental services division in bids that were due at the end of October of last year.

“The sale of our Environmental Services business at an enterprise value of $8 billion is substantially above our initial expectations and is a testament to the quality of the business that we have built,” GFL founder and CEO Patrick Dovigi says in a news release announcing the sale. “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 3s.

“The transaction allows us to monetize 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. In addition, GFL will maintain an option, not an obligation, to repurchase the Environmental Services business within five years of closing.”

Dovigi adds that the repayment of debt is expected to reduce GFL’s annualized cash interest expense by about $200 million, significantly improving free cash flow conversion.

“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,” Dovigi says. “We have a long-standing relationship with BC Partners, to whom we have delivered significant returns on their capital. We also look forward to working with Apollo, a leading alternative asset manager with deep expertise and a demonstrated track record of value creation for its stakeholders.”

Craig Horton, a partner at New York City-based Apollo, adds, “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.”

Paolo Notarnicola, partner and co-head of services at BC Partners, based in London, says, “Going forward, we are excited about the growth potential of this business, which is best placed to capitalize on the significant consolidation opportunity in the environmental services industry, including further expansion in the United States.”

Events, Batteries

Recycling Today Media Group’s battery recycling conference relocates

The Recycling Today Media Group, publisher of Recycling Today, Waste Today, Recycling Today Global Report, Construction & Demolition Recycling, Plastics Recycling and Scrap Recycling, has announced its 2025 Battery and Critical Metals Recycling Conference will be at the Loews Vanderbilt Hotel in Nashville, Tennessee, June 9-10. Known for its vibrant culture and central location, Nashville offers an exciting new setting for this essential event, which has been at the Westin Buckhead in Atlanta since it debuted in 2023.

As the market for environmentally responsible management of end-of-life batteries and battery manufacturing materials continues to grow, this conference serves as a pivotal gathering for professionals in the waste management and recycling, battery manufacturing, electric vehicle (EV), consumer electronics and stored power sectors.

“The demand for effective and sustainable solutions for battery scrap and end-of-life batteries continues to surge, creating immense opportunities and challenges,” Recycling Today Media Group Publisher James Keefe says. “Nashville offers the perfect backdrop to bring together industry leaders, innovators and policymakers to address these critical issues.”

The Battery and Critical Metals Recycling Conference delves into the essential topics of battery recovery and recycling of critical minerals, such as lithium, cobalt, nickel and aluminum. It also addresses fire safety, properly handling and transporting batteries, legislation as well as unique industry partnerships that are helping to move the battery recycling sector forward.

Panelists and attendees will have the opportunity to discuss a variety of pertinent topics:

• the environmental and economic imperatives of battery recycling;
• the challenges of safely managing end-of-life batteries, which pose risks such as contamination and fire hazards; and
• the growing demand for raw materials that are essential to the green energy revolution.

The Battery and Critical Metals Recycling Conference is tailored to the variety of stakeholders from across the rechargeable battery supply chain:

• automobile recyclers;
• battery and electronics producers;
• EV manufacturers;
• waste management and recycling companies;
• regulators, legislators and trade associations; and
• the investment community, including private equity firms.

Registration for the 2025 Battery and Critical Metals Recycling Conference is open. For more information and to register, visit www.batteryrecyclingconference.com.

Information regarding sponsorships is available through Recycling Today Media Group sales representatives by emailing rt-sales@gie.net.

In addition to the Battery and Critical Metals Recycling Conference, the Recycling Today Media Group hosts the Paper & Plastics Recycling Conference, MRF Operations Forum, Scrap Expo and Corporate Growth Conference. The group is a business unit of GIE Media Inc., a leading business-to-business media company based in Valley View, Ohio.