Canadian waste management company GFL Environmental has announced the sale of its environmental services division to private equity firms Apollo and BC Partners in a deal valued at C$8 billion ($5.59 billion). The transaction aims to reduce GFL’s debt, repurchase shares, and streamline its focus as a pure-play waste management firm. GFL will retain a 44% equity interest in the division, with Apollo and BC Partners holding 28% each.
The environmental services business includes liquid waste management and soil remediation services, which collectively accounted for nearly 23% of GFL’s total revenue in the third quarter. The deal, expected to close in the first quarter of 2025, provides GFL with the option to repurchase the division within five years.
CEO Patrick Dovigi highlighted the benefits of the transaction and said, “This deal will materially deleverage our balance sheet, accelerating our path to an investment-grade credit rating.” The Vaughan, Ontario-based company, which has C$9.52 billion in long-term debt, plans to use up to C$3.75 billion of the proceeds to repay debt, reducing its cash interest expense by approximately C$200 million annually. An additional C$2.25 billion will be allocated for share buybacks.
The move follows pressure from activist investor ADW Capital Management, which urged GFL to sell its environmental services business and sharpen its focus on core waste management operations.
