Dive Brief:

• GFL Environmental recently announced plans to commence a private offering of $275 million in unsecured notes and $500 million in secured notes. The company is also planning a $350 million equity offering with existing shareholders, according to a Bloomberg BNN interview with CEO Patrick Dovigi.
• GFL has reportedly seen $4 billion worth of interest in the $775 million worth of notes, which Dovigi said​ "just goes to show the resiliency of the business.” Proceeds will fund two U.S. acquisitions, including a deal announced today to buy Virginia-based County Waste.
• Asked about the company's recent IPO cancellation, Dovigi cited a "rough patch" in the market. “Regardless of whether we’re private or public, the plan remains unchanged," he said, noting GFL will keep its prospectus details up to date with the Securities and Exchange Commission. "We’ll go back to the market when we think it makes sense. Whether that’s in 2020 or 2021, we’re not sure."

Dive Insight:

Despite last month's IPO setback, and concern from some investors about a high debt load, the Canadian giant appears undeterred from its plans for rapid growth throughout North America. GFL now operates in 23 U.S. states and nine Canadian provinces, with projections for $4 billion in revenue next year.

The company appeared poised to finally launch an IPO last month, after years of discussion, but pulled back when it became clear the desired $20-24 share price wouldn't be attainable. GFL had estimated bringing in at least $1.83 billion from the offering, based on a $22 per share midpoint, if not more. $800 million of that would have been used to pay down existing debt, with the rest going to "general corporate purposes, including future acquisitions."

Following GFL's major acquisition of Waste Industries in 2018, the company has continued to close multiple smaller deals in both the United States and Canada.

Now, GFL is taking a different path to fund two more U.S. deals already in the works for Q4. Outside of the $775 million in new notes, the other $350 million is expected to come from existing shareholders BC Partners and Ontario Teachers’ Pension Plan. The two bought out Macquarie Infrastructure Partners in a 2018 recapitalization deal after the last time GFL considered going public.

Dovigi confirmed to Waste Dive that County Waste CEO Scott Earl, who will become a shareholder, is also part of the $350 million investment. Earl has a long background in the industry, having previously sold companies to BFI and Waste Connections. He acquired a majority stake in County Waste in 2011, later growing with additional investment from private equity firm Clairvest Group. Earl will join GFL as an employee.

County Waste now has operations in Virginia and Pennsylvania, with reported annual revenues of $180 million. The company runs a fleet of more than 410 trucks that service an estimated 410,000 residential and 19,000 commercial customers. County Waste also comes with six transfer stations and one MRF. Additionally, the company operates the Botetourt County Landfill in Virginia, via a contract it won last year. That agreement included plans for County Waste to close the landfill soon and continue disposal service by building a new transfer station.

GFL's acquisition of the company is expected to close in January 2020, pending regulatory approval. Dovigi declined to share details with Waste Dive on whether the second pending U.S. acquisition would be vertically-integrated, or how its size would compare to County Waste, but said to expect more details soon.