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GFL Environmental launches pre-IPO share sale, valuing company at $4.2-billion

GFL head Patrick Dovigi at a waste transfer station in Etobicoke.

Mike Ford/Mike Ford

Waste-disposal firm GFL Environmental Inc. and its bright-green garbage trucks are planning to pick up $125-million from institutional investors to fuel North American acquisitions, ahead of a potential initial public offering next year.

Toronto-based GFL collects trash from 2.5 million homes and 80,000 businesses in Canada and the United States with its distinctive "Green for Life" fleet. The private company built a network of solid- and liquid-waste disposal and soil-remediation businesses through 60 acquisitions over the past 11 years, including recent takeovers in Manitoba and Alberta.

GFL founder and chief executive officer Patrick Dovigi said Thursday in an interview that the company "is looking at a number of additional growth opportunities in all our business lines." He said GFL's "sweet spot" is to acquire private waste-disposal companies that generate $500,000 to $10-million in annual earnings before interest, taxes, depreciation and amortization (EBITDA). GFL currently has EBITDA of about $385-million.

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To fund growth, GFL is selling $125-million of shares in a pre-IPO private placement to institutional investors, such as pension plans, insurers and mutual funds. If successful, the share sale would give GFL an enterprise value of approximately $4.2-billion.

GFL plans to go public in 2018 if markets are supportive, Mr. Dovigi said. BMO Nesbitt Burns and CIBC World Markets are the company's underwriters on the planned private placement.

GFL has 4,500 employees and 140 facilities in Canada and Michigan; it moved into the U.S. market in 2016 by acquiring a business in the Detroit suburbs. The company began collecting garbage from 165,000 homes on the west side of Toronto in 2012 when the city opted to privatize a portion of its waste-disposal operations.

The company is currently owned by the 38-year-old Mr. Dovigi, a one-time Edmonton Oilers prospect, and private equity funds run by New York-based HPS Investment Partners LLC and Australia's Macquarie Group Ltd. The two private equity firms are long-time supporters, and invested an additional $225-million in GFL last year to help finance the Michigan acquisition.

Last year, GFL flirted with a transaction that would have seen it go public by being taken over by a special purpose acquisition corporation, or SPAC, but decided instead to stay private and continue building the company.

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