UPDATE: July 22, 2019: GFL Environmental has filed initial forms with the U.S. Securities and Exchange Commission, along with relevant authorities in all Canadian provinces and territories, for a planned IPO. The proposed deal will involve subordinate shares. Details on the number and price of those shares have not been finalized. As reported by The Globe and Mail and Bloomberg, the deal is expected to raise an estimated $1.5 billion.

Dive Brief:

• Toronto-based GFL Environmental aims to raise up to C$1.98 billion ($1.5 billion USD) for an IPO this fall, according to a report by The Globe and Mail. GFL declined to comment on the report in an email to Waste Dive.
• Per the report, GFL plans to list shares on both the Toronto Stock Exchange and an undetermined U.S. exchange. Multiple investment banks have been brought on to advise, including Royal Bank of Canada, Bank of Montreal, J.P. Morgan Chase and Goldman Sachs Group.
• GFL's annual revenue is reportedly around C$3.5 billion, with C$1 billion in EBITDA. The potential IPO would be used to fuel further growth for the North American company. This would be the first North American industry IPO since Advanced Disposal went public in 2016.

Dive Insight:

GFL has been down this road before. The company actively pursued IPO plans in 2017 before opting to stay private through an April 2018 recapitalization deal. That deal, led by U.K.-based BC Partners and Ontario Teachers' Pension Plan, valued GFL at C$5.125 billion. On the day of the announcement, while speaking at WasteExpo's 2018 investor summit, CEO Patrick Dovigi said it was his "preference to stay private as long as we could."

While GFL had business in Michigan at the time, its U.S. presence increased exponentially later that year. Between the major acquisition of Waste Industries (valued at $2.825 billion) and liquid waste business Future Environmental (terms not disclosed), GFL's footprint abruptly expanded to 20 states. The company already had business in all but one Canadian province.

Speaking to Waste Dive last fall, Dovigi expressed hesitance about pursuing an IPO, maintaining that he was happy with the company's two new backers.

"We can focus on managing two shareholders today, not two thousand shareholders, and really just focus on our business not having to deal with the rest of the noise of a public markets," said Dovigi, adding, "The day will come. It's a question of when."

Since then, GFL has completed at least four tuck-in deals in Colorado and North Carolina and is now the largest private service provider in the U.S. Pending completion of the Waste Management-Advanced Disposal deal, the company is expected to soon become the fourth-largest public or private operator.

This rising stature continues to captivate attention within the industry and the financial community that follows it. Dovigi's session was well-attended at WasteExpo's 2019 investor summit, where he once again downplayed plans to go public — even while hinting that the company's expanding scale might make it "inevitable."

Between that session and a subsequent interview with Waste Dive, GFL outlined plans for significant growth. According to Dovigi, about 60% of the acquisition pipeline is expected to come from Canada, where the majority of the market is still not controlled by large players. Further U.S. expansion was said to be targeted east of the Mississippi.

"We kind of feel like we're just getting started," CFO Luke Pelosi told Waste Dive. "[F]ast forward 5-10 years, and you look at the business that Patrick's going to have built over a 15-20 year time period, I think it's going to be one of the largest players in the continent that came from very little."

If IPO plans do indeed move forward, the Canadian agglomerate's expansion pace may only accelerate in the years to come.