Dive Brief:

• Canadian service provider GFL Environmental is planning to go public this year, as reported by Bloomberg Markets. This follows a similar report by Reuters in November that projected an initial public offering could be coming in the first quarter of 2018.
• The Ontario-based company is said to be working with Royal Bank of Canada, Goldman Sachs Group and Bank of Montreal to lead its IPO. GFL has yet to comment on these reports.
• GFL is reportedly hoping to raise more than $800 million USD in the sale, which would be the largest Canadian IPO since Kinder Morgan Canada raised approximately $1.4 billion USD in May 2017.

Dive Insight:

GFL was founded by CEO Patrick Dovigi, a former hockey player, in 2007, and has grown rapidly to include business across much of Canada and one U.S. state in the years since. The company now services an estimated 2.5 million households via municipal contracts and an additional 80,000 business customers, employing more than 5,000 people.

HPS Investment Partners acquired a non-controlling stake in 2014. HPS then invested additional equity, along with Macquarie Infrastructure Partners III, to fund GFL's aquisition of the major Canadian company Matrec in 2016. This made GFL one of the largest service providers in Canada and set it up for expansion into the U.S. later that year, with further private equity backing.

The Oct. 2016 acquisition of Rizzo Environmental Services brought GFL into Michigan, though with more turbulence than expected. Within weeks of the deal, surprise news came out that Rizzo was involved in a federal corruption investigation, which remains ongoing. GFL's quick moves to rebrand the Rizzo fleet and firm up relationships helped it maintain all municipal business during that transition. Since then, the company has continued its U.S. expansion with the 2017 acquisition of five municipal contracts from Republic Services in Michigan and talk continues about additional deals in the area.

During the WasteExpo investor summit in May 2017, Dovigi said he saw further expansion potential in northern states such as Ohio and Indiana. Growth in Canada was described as more limited, aside from tuck-ins, because Waste Management and Waste Connections already held large market shares. At the time, Dovigi said it could be at least a couple years until GFL considered going public. Though that timeframe seemed to accelerate over the summer as Dovigi discussed plans for more acquisitions.

If GFL does move forward with these plans, and raises anywhere close to the amount it hopes, this would be one of the biggest waste industry IPOs in recent years. The last one on this scale was Advanced Disposal in fall 2016, which ended up raising close to $350 million at the time. GFL's entry would add one more name to the short list of publicly traded companies while also potentially fueling the trend of consolidation if it makes further U.S. acquisitions.