GFL Is Said to Consider Sale of Stake in C$5 Billion Infra Arm

A GFL Environmental Inc. garbage truck arrives at a transfer station in Toronto, Ontario, Canada, on Thursday, Oct. 24, 2019. GFL, North America's fourth-largest waste hauler by revenue, seeks to raise as much as $2.1 billion in what would be the largest initial public offering in Canada since 2004. Photo by Cole Burston /Bloomberg

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(Bloomberg) — GFL Environmental Inc. is considering the sale of a stake in its infrastructure arm, people with knowledge of the matter said, in what could be one of Canada’s largest infrastructure deals this year. 

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The company is seeking a valuation of as much as C$5 billion ($3.7 billion) including debt for the affiliate, known as Green Infrastructure Partners Inc., the people said. The stake sale is attracting initial interest from potential investors including General Atlantic, Energy Capital Partners and Neuberger Berman, the people said. 

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The potential deal could help raise further funds for expansion at Green Infrastructure Partners, whose shareholders also include HPS Investment Partners. Deliberations are ongoing and no final decision on the size or timing of any transaction have been made, according to the people, who asked not to be identified discussing confidential information. 

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Shares of GFL have risen about 32% in Toronto trading over the past year, giving the company a market value of about C$24.6 billion. Other bidders could also emerge, the people said. 

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Representatives for GFL, General Atlantic, ECP, Neuberger Berman and HPS declined to comment. 

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Markham, Ontario-based Green Infrastructure Partners specializes in road building, paving, site development, and other civil infrastructure services, and has rapidly scaled operations through a series of acquisitions. The business operates independently of GFL’s core solid waste and environmental services segments.

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Investors continue to pile into infrastructure assets that offer predictable cash flows and inflation protection. Rising construction demand tied to public transit, highway rehabilitation, and municipal infrastructure upgrades has positioned Green Infrastructure Partners to benefit from long-term trends.

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GFL has become one of North America’s largest waste management companies in recent years by rapidly acquiring rivals. The debt used to finance that growth has become a concern for investors, prompting the company to begin looking for buyers for less profitable businesses. Earlier this year, it agreed to sell a majority stake in its liquid environmental services division to funds managed by Apollo Global Management Inc. and BC Partners in a deal that valued the unit at C$8 billion.

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