GFL Environmental Inc. Announces Agreement to Sell Environmental Services Business Valued at $8.0 Billion

Core Viewpoint - GFL Environmental Inc. has entered into a definitive agreement to sell its Environmental Services business for an enterprise value of $8.0 billion, retaining a $1.7 billion equity interest and expecting net cash proceeds of approximately $6.2 billion after taxes and retained equity [1][4]. Financial Impact - GFL plans to use up to $3.75 billion of the net proceeds to repay debt, with up to $2.25 billion allocated for share repurchases, subject to market conditions [2][4]. - The transaction is expected to result in a pro forma Net Leverage of 3.0x, enhancing financial flexibility and accelerating the path to an investment-grade credit rating [2][4]. - The repayment of debt is anticipated to reduce annualized cash interest expense by approximately $200 million, significantly improving free cash flow conversion [3][4]. Strategic Benefits - The sale is viewed as a testament to the quality of GFL's Environmental Services business, exceeding initial expectations [3][4]. - GFL retains an equity interest in the Environmental Services business, allowing participation in future value creation while monetizing the business in a tax-efficient manner [3][5]. - The transaction maintains synergies between GFL's Environmental Services and Solid Waste businesses, positioning GFL for future growth opportunities [4][5]. Transaction Details - GFL will retain a 44% equity interest in the Environmental Services business, while Apollo Funds and BC Partners will each hold a 28% equity interest [5]. - The transaction is expected to close in the first quarter of 2025, subject to customary closing conditions [5][6]. - The board of directors unanimously approved the transaction based on a fairness opinion from an independent financial advisor [6].