Key Takeaways
- • GFL Environmental's board unanimously rejected a leveraged buyout offer after a special committee evaluation, and the company will remain publicly traded, the company announced Tuesday.
- • The highest bid came from a consortium led by Blackstone, KKR and Energy Capital Partners at a reported $52 per share, a premium to the $45.88 share price on Monday afternoon, but below the roughly $58 per share that management sought, according to The Globe and Mail.
- • Special committee chair Dino Chiesa said the proposed valuations did not reflect the full value of GFL's standalone strategy, which the board believes offers superior risk-adjusted returns.
- • CEO Patrick Dovigi reiterated confidence in GFL's free cash flow inflection and financial targets, and said he will keep his stake and remain in a leadership role.
- • Executives acknowledged that certain parties remain interested in acquiring some or all stakes held by financial sponsor shareholders, and the company will facilitate that process as required.
Summary
GFL Environmental's board of directors rejected a leveraged buyout offer following an evaluation by a special committee of independent directors, and affirmed that the company will remain public, the company announced Tuesday. Executives had earlier disclosed that the company was receiving LBO offers from private equity investors and had formed the special committee to evaluate bids.
The highest offer came from a consortium led by Blackstone, KKR and Energy Capital Partners, according to The Globe and Mail, which reported late Monday. The reported bid of $52 per share would have represented a premium to GFL's $45.88 share price as of Monday afternoon. Company executives, however, were seeking an offer near the $58 per share range. Dino Chiesa, chair of the special committee, said the valuations proposed, though a premium to current trading levels, did not reflect the full value of the company's standalone strategy. "The Board is unanimous in its conviction that GFL's standalone growth plans offer far superior risk-adjusted returns for shareholders," he said.
A transaction would have returned the fourth-largest public waste company in North America to private ownership for the first time since its 2020 IPO, which raised nearly $2.2 billion. CEO Patrick Dovigi, who founded the company in 2007, had said he would retain his stake and a leadership position regardless of the outcome. In his Tuesday statement, Dovigi said free cash flow had "meaningfully inflected," providing "ultimate financial flexibility for capital deployment" in M&A and internal improvements.
Buyout interest first surfaced in July, following a share price decline after GFL's acquisition of Secure Waste Services, an Alberta oilfield waste company that closed on Sept. 1. The company said in its third-quarter earnings release that it remained on track for its targeted year-end net leverage in the mid-3x range. Dovigi has said the buyout negotiations had no effect on M&A strategy and that the company could double in size over the next six or seven years through acquisitions. GFL recently acquired Texas hauler Frontier Waste from private equity backers.
In the release, executives also noted that "certain parties remain interested in acquiring some or all of the stakes held by our financial sponsor shareholders and we will facilitate that process as required." The Globe and Mail reported that BC Partners may sell a significant portion of its stake as a result of the buyout process.
The highest offer came from a consortium led by Blackstone, KKR and Energy Capital Partners, according to The Globe and Mail, which reported late Monday. The reported bid of $52 per share would have represented a premium to GFL's $45.88 share price as of Monday afternoon. Company executives, however, were seeking an offer near the $58 per share range. Dino Chiesa, chair of the special committee, said the valuations proposed, though a premium to current trading levels, did not reflect the full value of the company's standalone strategy. "The Board is unanimous in its conviction that GFL's standalone growth plans offer far superior risk-adjusted returns for shareholders," he said.
A transaction would have returned the fourth-largest public waste company in North America to private ownership for the first time since its 2020 IPO, which raised nearly $2.2 billion. CEO Patrick Dovigi, who founded the company in 2007, had said he would retain his stake and a leadership position regardless of the outcome. In his Tuesday statement, Dovigi said free cash flow had "meaningfully inflected," providing "ultimate financial flexibility for capital deployment" in M&A and internal improvements.
Buyout interest first surfaced in July, following a share price decline after GFL's acquisition of Secure Waste Services, an Alberta oilfield waste company that closed on Sept. 1. The company said in its third-quarter earnings release that it remained on track for its targeted year-end net leverage in the mid-3x range. Dovigi has said the buyout negotiations had no effect on M&A strategy and that the company could double in size over the next six or seven years through acquisitions. GFL recently acquired Texas hauler Frontier Waste from private equity backers.
In the release, executives also noted that "certain parties remain interested in acquiring some or all of the stakes held by our financial sponsor shareholders and we will facilitate that process as required." The Globe and Mail reported that BC Partners may sell a significant portion of its stake as a result of the buyout process.
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