Private equity firms Apollo Global Management and BC Partners have joined forces to agree a deal to acquire GFL Environmental’s Environmental Services business at an enterprise value of CAD8bn ($5.59bn).
This high-profile deal underscores private equity’s increasing focus on the environmental services sector, known for its defensive characteristics and growth potential.
The deal structure sees GFL retain a 44% equity stake in the Environmental Services business worth CAD1.7bn, with Apollo and BC Partners each acquiring a 28% holding. GFL expects to realise cash proceeds from the transaction of approximately CAD6.2bn net of the retained equity and taxes.
GFL plans to use approximately CAD3.75bn of the CAD6.2bn net proceeds from the sale to reduce its debt, aiming to bring its net leverage ratio down to 3.0x. The remaining funds, up to CAD2.25bn, are earmarked for opportunistic share repurchases, enhancing shareholder value.
In a press statement, Craig Horton, Partner at Apollo, said: “The Environmental Services business is a leader in essential industrial and waste management services, positioned for strong growth in attractive end markets. With Apollo’s platform and resources, we see significant opportunities to drive both organic and inorganic growth as an independent entity.”
For BC Partners, this acquisition builds on its established relationship with GFL. “This transaction positions the business to capitalise on consolidation opportunities in the US and beyond,” said Paolo Notarnicola, Partner and Co-Head of Services at BC Partners. “The combination of Apollo’s structuring expertise and BC Partners’ deep understanding of the sector creates a robust platform for growth.”
The deal, which has been unanimously approved by GFL’s board of directors following a fairness opinion from Canaccord Genuity, is expected to close in Q1 2025, pending customary regulatory approvals.
