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GFL Environmental rejects takeover bids
Canadian garbage hauler opts to remain public
GFL Environmental trucks parked in Toronto. (Cole Burston/Bloomberg)
Key Takeaways:
- GFL Environmental rejected buyout proposals, ending a monthslong sale process after its board determined the bids undervalued its long-term prospects.
- Blackstone’s consortium offered $52 a share, valuing GFL above $22 billion and representing a 13% premium to the Nov. 9 closing price.
- GFL will remain public but will facilitate potential purchases of financial sponsors’ stakes and remains open to future proposals.
Canada’s GFL Environmental Inc. said it rejected buyout proposals and will stay public, ending a monthslong process that attracted interest from investors including Blackstone Inc. and Brookfield Asset Management Ltd.
A special committee of independent directors determined the bids didn’t reflect the company’s long-term prospects, according to a statement Nov. 10. An offer from the Blackstone consortium came in at $52 a share, valuing the company at more than $22 billion, according to a person familiar with the matter.
That would be about 13% higher than the closing price of $45.88 on Nov. 9 in New York.
“GFL’s stand-alone growth plans offer far superior risk-adjusted returns for shareholders,” Dino Chiesa, chair of the board’s special committee, said in a statement.
The decision ends a closely watched takeover process that drew interest from some of the world’s biggest infrastructure investors. Bloomberg News reported in September that KKR & Co., Energy Capital Partners and Blackstone had teamed up on one bid, while Brookfield and IFM Investors were pursuing a rival offer.
GFL, which has built a large North American waste-management business through acquisitions, has a market value of about $20 billion.
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A GFL Environmental garbage truck arrives at a transfer station in Toronto. (Cole Burston/Bloomberg)
Patrick Dovigi, the company’s billionaire founder, had said he would be willing to roll his entire stake into a takeover, while acknowledging that other large shareholders had differing views on the company’s valuation and whether to sell.
Some of GFL’s largest investors believed the shares were worth “well into the $60s,” Dovigi said in late October.
Despite rejecting a full takeover, GFL left open the possibility of transactions involving its financial sponsors, including BC Partners, one of its largest shareholders. “We understand 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,” he said.
The board also said it remains open to future proposals. GFL’s free cash flow per share is on a path to double over the next five years, giving it more flexibility to pursue acquisitions, invest in growth and buy back stock, Dovigi said in the Nov. 10 statement.
