(Bloomberg) — A consortium backed by Apollo Global Management Inc. and BC Partners is close to acquiring a controlling stake in GFL Environmental Inc.’s environmental services unit, in a deal that could value the business at about C$8 billion ($5.6 billion), including debt, people familiar with the matter said.
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The investor group is in advanced talks for the stake and an agreement could be announced within days, the people said, asking not to be identified because the information is private.
GFL is likely to retain an option to buy back the shares from Apollo and BC Partners at a later date, the people said.
BC Partners has been active in Canada recently, agreeing to sell GardaWorld late last year in a deal valuing the security services firm at about C$13.5 billion. Deliberations on the GFL transaction are ongoing and an agreement could still be delayed, the people said.
Representatives for Apollo, BC Partners and GFL declined to comment.
Vaughan, Ontario-based GFL offers services in solid waste and liquid waste management as well as soil remediation in Canada and the US, according to its website. The company employs more than 20,000 people.
Shares of GFL have risen 36% in the past year in New York, giving the company a market value of about $17 billion. The shares, which fell 1.4% to $44.02 on Monday, rose 1.7% after the close of regular trading.
In 2018, a BC Partners-led consortium invested in GFL in a deal that valued the Canadian firm at $5.1 billion including debt. Ontario Teachers’ Pension Plan was among the investors and Patrick Dovigi, GFL’s founder and chief executive officer, maintained his role and significant ownership in the firm.
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.
In November, GFL said it received interest from several buyers for its environmental services business and might sign a deal by early 2025. It said at the time that it would use a chunk of the proceeds to pay down debt, with the remainder available for share buybacks or other purposes.
The environmental services unit generated about C$1.7 billion in revenue last year and more than C$500 million in earnings before interest, taxes, depreciation and amortization, the people said.
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(Updates with share gain in late trading in seventh paragraph.)
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