GFL Environmental is holding discussions with several private equity firms about a full take-private transaction or a sale of a significant equity stake in the company. The talks follow a period in which GFL’s share price lagged its solid waste peers even as the company pursued one of its largest acquisitions since going public.
Between April 10 and July 2, GFL shares fell 11 percent while WM gained 0.4 percent, Republic Services rose 1.2 percent and Waste Connections climbed 4.5 percent, according to data compiled by Stifel. The S&P 500 rose nearly 10 percent over the same stretch. Analysts view the pullback as a mispricing of a business with strong cash flow and margins, a gap management has been vocal about closing.
Private capital is not new to GFL’s ownership structure. BC Partners and the Ontario Teachers’ Pension Plan bought out the company’s earlier backers in 2020, and sovereign wealth fund GIC holds a stake alongside BC Partners today.GFL also sold a majority stake in its environmental services division to private equity investors last year for $8 billion, and Energy Capital Partners recapitalized the company’s infrastructure services arm at a $4.25 billion valuation.
Any take-private deal would need to account for GFL’s pending acquisition of Secure Waste Services, approved by Secure’s shareholders in May and still awaiting Canadian regulatory sign-off. Termination provisions would require GFL to pay $20 million and Secure up to $200 million if that deal collapses. GFL CEO Patrick Dovigi, who holds an estimated 27 percent of shareholder votes, is expected to retain his stake rather than exit in a private structure. Analysts note that a sustained rebound in GFL’s share price would narrow the gap a buyout would need to close.