GFL in talks to sell stake in infrastructure arm, source says
Canadian waste management giant GFL Environmental Ltd. GFL-T is in talks to sell a stake in its infrastructure arm, GIP, in a deal that would value GIP's equity around $3.3-billion, according to someone familiar with the situation.
GIP stands for Green Infrastructure Partners and was spun out of the waste management company in early 2022. GIP's services include demolition, excavation and remediation, and the company bulked up by purchasing Coco Paving, a family business run by siblings Jenny and Rock-Anthony Coco that predominately operates in Ontario.
GIP was created with financing from private equity firm HPS Investment Partners, which took a 47 per cent stake, while GFL kept 45 per cent and GFL co-founder Patrick Dovigi owned eight per cent.
Mr. Dovigi has long talked about wanted to monetize the business, potentially through an initial public offering, but GIP faced headwinds in recent years, partly owing to cost inflation on projects. GIP has also replaced a number of executives, including its CEO.
Instead of going public, GIP is now in talks to sell a stake in the business, though the expect percentage to be sold remains unclear. A deal would allow existing owners to cash out some of their holdings, and would also provide some capital for growth, according to the source.
The Globe and Mail is not naming the source because they were not authorized to speak publicly about the transaction.
After adding in $1.3-billion in debt, the deal would give GIP an enterprise value around $4.5-billion, according to the source.
There are currently six private capital firms in the bidding process, and the deal is expected to close mid-summer, although talks could fall apart if market conditions deteriorate.
More to come
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