UPDATE: March 4, 2020: GFL Environmental has priced its initial public offering (IPO) at $19 per share, down from a targeted $20-21 per share, following recent market turbulence. The company now plans to sell 75 million subordinate shares for net proceeds of approximately $1.336 billion. That could rise to $1.543 billion if underwriters exercise an option to purchase additional shares.

Concurrently, GFL is also offering 15.5 million tangible equity units at a price of $50 each. Net proceeds will be approximately $749.8 million, or upward of $862.3 million if underwriters exercise the option to purchase additional units. The two offerings are now set to close on Thursday, with the potential for GFL to net more than $2.4 billion on the high end.

Dive Brief:

• GFL Environmental has revived plans for an IPO that could launch as soon as the week of February 24, as first reported by The Globe and Mail. Waste Dive has confirmed these details via a source with direct knowledge of the plans. 
• The Canadian company's subordinate shares are once again expected to price in the $20-24 range. GFL previously sought to raise upward of $2.4 billion – which would have been one of the largest IPOs in Canadian history – but may now be aiming higher.
• Divisions of J.P. Morgan, BMO Capital Markets, Goldman Sachs, RBC Capital Markets and Scotiabank were renamed as underwriters in filings with financial regulators in the United States and Canada on Tuesday. A division of BC Partners, an existing GFL investor, will also be a U.S. underwriter.

Dive Insight:

GFL has come close to an IPO multiple times. In 2018, the company ended up recapitalizing through a deal with BC Partners and Ontario Teachers’ Pension Plan instead. Last year, GFL got much closer to launching an IPO, but backed off at the last minute in November after only seeing interest for around $18 per share. The company has continued to update its prospectus details in recent months, and CEO Patrick Dovigi previously left the door open for another IPO attempt in the future, but a renewed attempt hadn't been expected quite so soon.

This latest plan is moving ahead quickly and with a stronger reception, according to the source who spoke with Waste Dive. A combination of reverse inquiries from investors and improved market conditions are among the main factors in GFL's decision to go again.

While WeWork's high-profile IPO implosion in September created an atmosphere of uncertainty, January's successful IPO from Reynolds Consumer Products is viewed by insiders as a positive factor. A strong run for stock prices among the North American waste industry's largest publicly-traded players has also bolstered the case.

Since November, GFL has taken steps to raise capital to fund acquisitions that were already underway. This includes $775 million in new debt issued in December, along with another $264.7 million in new equity from existing investors over January and February that was fully reported this week. GFL spent $485 million to close the acquisition of Virginia-based County Waste in January. As originally reported by Waste Dive, the company also recently closed on the $380 million acquisition of Michigan-based American Waste. Additionally, GFL has completed two Canadian tuck-in deals this year.

According to its latest filing, GFL earned nearly CA$3.35 billion in revenue for 2019 with a net loss of CA$451.6 million. New figures also show more diversification within the business, with GFL's percentage of solid waste revenue dropping slightly from 77% to 74%. Infrastructure and soil remediation was the next largest segment at 16%, followed by liquid waste at 10%.

​These figures mark a dramatic expansion from 2018 revenue of CA$1.85 billion – following the major acquisition of Waste Industries at the end of that year – and make GFL the North American waste industry's fourth-largest player, as measured by revenue. Still, the company's total debt remains high (more than CA$7.68 billion) and it cites debt payment as one planned use of IPO proceeds.

Future acquisitions are listed as another potential use, and the company has signaled it plans to continue a streak of more than 100 deals since 2007. One possibility, which the company has not publicly ruled out, is to buy expected divestitures from Waste Management's pending acquisition of Advanced Disposal Services. GFL has a more limited presence in many of the likely divestiture markets than some other large competitors, making it a potentially viable buyer for some or all of the assets. Waste Management now anticipates it will receive regulatory approval by next month at the latest, with a divestiture sale to follow soon after.

In the meantime, it appears increasingly likely the waste industry will now be seeing its first major IPO since Advanced went public in 2016. Shares have been approved for listing on the New York Stock Exchange, and conditionally approved for listing on the Toronto Stock Exchange, under the symbol "GFL."