GFL Environmental Inc. GFL-T held talks with Apollo Global Management Inc. APO-N about a potential investment, according to a source familiar with the discussions, with the American private equity firm circling the Canadian waste management giant while its share price is depressed.
GFL’s board of directors has formed a special committee to consider any investment or takeover offers, the source said. But any complete takeover would likely hinge on the support of GFL founder and chief executive officer Patrick Dovigi, who controls roughly one-quarter of the vote through his multiple voting shares.
Without his blessing, Apollo or a rival bidder may attempt to buy GFL shares currently owned by BC Partners and GIC, which is Singapore’s sovereign wealth fund. BC Partners was the lead investor in a recapitalization of GFL in 2018, and private equity firms tend to hold their positions for five to seven years.
The Globe and Mail is not naming the source because they are not authorized to speak publicly about the discussions.
Apollo and GFL both declined to comment for this story.
Waste management giant GFL approached by two bidders about potential privatization, source says
GFL has been publicly traded on the Toronto Stock Exchange and the New York Stock Exchange since March, 2020, and its share price has doubled in the U.S. since the initial public offering. However, GFL’s shares have struggled over the past year relative to its three main North American competitors – Waste Management Inc. WM-N, Waste Connections Inc. WCN-T and Republic Services Inc. RSG-N
Across the sector, waste management stocks have underperformed of late, but before news of potential takeover talks broke on Friday, GFL’s shares were down 18 per cent over the past year. Its three rivals are roughly flat to down 10 per cent over the same time period, while the S&P 500 is up 19 per cent.
GFL’s shares climbed 7.6 per cent on Friday in Toronto on news of talks with private buyers, giving the company a market value of $21-billion. (U.S. exchanges were closed on Friday for the July 4 holiday.)
Since its founding in 2007, GFL has spent more of its life under private ownership than it has as a public company, but going private again could complicate liquidity options for its founder. One condition of any cash takeover, according to the source, is that Mr. Dovigi rolls his shares into an investment vehicle that the buyer would set up to own GFL. That means Mr. Dovigi would remain a significant shareholder through a private investment vehicle run by someone else.
An investment vehicle could also be used if the bidder bought a minority stake, and it is possible that BC Partners and GIC could recycle some of their sale proceeds into this vehicle.
Apollo and GFL have worked together before. In January, 2025, GFL sold a majority stake in its environmental services division to Apollo and BC Partners, delivering $6.2-billion in cash proceeds to GFL – money that was partially used to pay down its heavy debt load.
GFL’s environmental services division offers liquid waste management and soil remediation services, among other things, and the company launched an auction for the division in mid-2024.
Back then, GFL faced a similar scenario to today. Its share price had fallen, and The Globe reported the company had hired J.P. Morgan as a financial adviser to weigh both a full-blown privatization of the company and the sale of its environmental services division.
Ultimately, the division sale was chosen, and GFL put out a statement saying that management still saw strong organic growth potential for the overall company. “We do not believe that taking GFL private at this time is in the best long-term interest of our shareholders,” Mr. Dovigi said during the summer of 2024.
Now, GFL has again hired J.P. Morgan as its financial adviser for the current discussions. The talks were formalized with Apollo in late May, according to a document reviewed by The Globe.
For any full blown takeover to proceed this time around, any buyer will have to offer a high enough price to appease GFL shareholders. Although the company’s share price is depressed relative to rivals, shareholders who believe in GFL’s long-term prospects will not want to sell for cheap.
GFL is also in the middle of its $5.4-billion acquisition of Calgary-based Secure Waste Infrastructure Corp., which was announced in April. GFL is paying for that deal mostly using shares, with Secure agreeing to receive a split of 80 per cent stock and 20 per cent cash.
Because current Secure shareholders will want a say in future ownership of their company, any GFL takeover is expected to include a condition that will require the Secure deal to close. Secure shareholders are also expected to be given the chance to vote on any go-private deal.