GFL to file the biggest IPO in Canada since 2004

The SEC and Canadian securities regulatory authorities have received an amendment from GFL Environmental Inc. in relation to its initial Public Offering seeking to subordinate voting shares concurrently in the United States and Canada.

The North American provider of diversified environmental solutions proposes to issue 87,572,500 Subordinate Voting Shares priced at US $20 to $24 per share for potential proceeds of up to US $2.1 billion or $1.9 billion on average according to Nasdaq.

The offering will be split into two with an offering of 86,533,864 primary subordinate voting shares by GFL and 1,038,636 secondary subordinate voting shares by Josaud II Holdings Inc., an entity owned and controlled by Patrick Dovigi, founder, Chairman, President & CEO of GFL.

The environmental solutions provider intends to list its subordinate shares on the Toronto Security Exchange (TSX), in Canada. The listing will be under its symbol “GFL” both in the US (NYSE) and in Canadian (TSX) exchanges.

 GFL has outlined its plans for the extra capital – on top of the list is paying down its debts and other general corporate purposes, including future acquisitions.

The handlers of the deal are said to be JPMorgan Chase & Co., Bank of Montreal, Goldman Sachs Group Inc., Royal Bank of Canada and Bank of Nova Scotia. Once the IPO materializes, GFL will have 11,946,849 multiple voting shares and 315,234,402 subordinate voting shares should the underwriters exercise their option to purchase additional subordinate voting shares in full, placing GFL’s equity at a valuation of US $7.85 billion (if priced at US $24 per IPO share).

BC Partners, Ontario Teachers’ Pension Plan, and GIC Private will control 117,945,269 subordinate voting shares (37.6%), 44,901,032 subordinate voting shares (14.3%) and 27,716,086 subordinate voting shares (8.8%) respectively. Effectively, if the over-allotment option is fully exercised, their stakes will be slashed to 28.0%, 13.0%, and 6.6%.

The multiple voting shares, on the other hand, will fully (100%) be controlled by GFL’s CEO Dovigi. The company’s IPO will come at a time when waste-haulers’ shares are bullish.

 America’s largest trash firm. Waste Management Inc., has risen more than threefold since 2011, in addition to a 29% rise this year. Republic Services Inc. ballooned more than two times from 2011, a 21% rise this year to date, CNBC reported.

In terms of revenue and operating footprint, GFL ranks fourth in the whole of North America serving more than 4 million households.