BC Partners and Ontario Teachers’ to acquire GFL Environmental for $5.125B

GFL Environmental Inc. has entered into an agreement to recapitalize GFL Environmental Holdings Inc. with investors led by BC Partners, including Ontario Teachers’ Pension Plan (Ontario Teachers’ or OTPP) and others.

The transaction implies a total GFL enterprise value of approximately $5.125 billion, making GFL one of the largest environmental services companies in North America.

Patrick Dovigi, Founder & CEO, will maintain his role and leadership of GFL, as well as significant ownership in the company, while BC Partners and Ontario Teachers’ will bought out the interests of current partners including funds managed or associated with HPS Investment Partners, Macquarie Infrastructure Partners III and Hawthorn Equity Partners.

The transaction is expected to close by June 30, 2018, subject to customary closing conditions.

Scotiabank acted as financial advisor to BC Partners in Canada with Citi in the United States. Citigroup Global Markets Inc. also provided committed financing for the transaction. Osler, Hoskin & Harcourt LLP and Simpson Thacher & Bartlett LLP provided legal advice to the investors.

RBC Capital Markets, CIBC World Markets Inc., Goldman Sachs & Co. LLC, BMO Capital Markets and Barclays Capital Canada acted as financial advisor to GFL. Stikeman Elliott LLP and Cleary Gottleib Steen & Hamilton LLP are legal advisors to GFL.

GFL is one of the fastest growing North American providers of diversified environmental solutions. It provides services in solid waste management, liquid waste management and infrastructure management. Through its network of more than 140 facilities across Canada and in Michigan, GFL provides cost-effective waste management solutions that encourage greater environmental responsibility. GFL’s team of more than 5,000 employees provides local services to more than 2.5 million households under municipal contracts and to more than 60,000 industrial, commercial and institutional customers.

Dovigi, on behalf of GFL, said “today is a very important milestone for the next phase of growth of GFL. From our humble beginnings in 2007 with eight employees to having now grown to a workforce of over 5,000 in both Canada and the United States, the last 10 years have been nothing short of remarkable. The signing of this transaction reflects the hard work and dedication of each and every one of our employees whose tireless efforts make GFL what it is today. Without them, our continued success would not be possible.”

Dovigi added, “BC Partners and Ontario Teachers’ tick all the boxes for us at GFL. Having founded the company, it was very important to me to find partners that shared the same principles, values and vision, along with having significant capital to fund our ambitious growth plans. I would like to thank HPS Investment Partners, Macquarie Infrastructure Partners and Hawthorn Equity Partners for their support of GFL during the past years.”

Paolo Notarnicola, Senior Partner, who led the investment said: “BC Partners is excited to be partnering with Patrick and his high quality management team. Our goal is to provide the capital and strategic support necessary for the continuation of their remarkable growth story.” Raymond Svider, Managing Partner and co-Chairman of BC Partners, added: “We look forward to a close collaboration with GFL and our partners at Ontario Teachers’ as an important part of our long-term strategy to grow in the Canadian marketplace.”

“GFL is an exceptional Canadian success story led by a proven management team. We expect this partnership with GFL and our partners at BC Partners to create significant value for our stakeholders,” said Jane Rowe, Senior Managing Director, Private Capital at Ontario Teachers’ Pension Plan.”

photo credit: GFL

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.