GFL Environmental Inc. Serving Canada & 23 U.S. States

Ordinarily, we like to cover smaller, local-level companies, describe their rise to solvency and get into some of the details that make their stories interesting. It’s not often that a large company can strike a similar chord, struggling to grow, offering a respectable value proposition not only to customers but to a community- while achieving successes that warm the heart. But Green For Life (GFL) USA, a Canadian based company that has expanded into the Northern United States, fits the bill.
The company was founded in 2007 by Canadian native Patrick Dovigi, a veteran of professional Canadian hockey- who’s not accustomed to settling for second best. In just 11 years, he’s grown his waste management company by leaps and bounds and has become a major player in the industry.

With its main headquarters in Vaughan, Ontario- GFL is a heavily diversified waste management organization with a broad range of waste management services. These include liquid and solid waste management, as well as soil and infrastructure remediation via its duel platforms in Michigan and Canada. The company’s workforce is more than 10,000 strong and provides environmental services to more than 60,000 clients and customers. But where this relatively new player stands out- considering it’s less than a decade and a half old- is the fact that it provides non-hazardous waste, solid waste services to two and a half million households on the North American continent spread over Canada and 23 US states. That could conceivably place GLF on par with major utility companies.

As the fourth largest diversified environmental services company on the continent, GFL’s massive potential hasn’t escaped Dovigi. In recent years, GLF has made some big moves looking to expand its reach. Success has been mixed. But with a few growing pains, they are making gains. In October of 2018, as part of a large merger plan with Waste Industries (WI), GFL made a private offering of $400,000 million due in 2026. The notes were intended to be funded in escrow. Combined with the proceeds from planned loans in excess of $1,300 million, and cash equity contributions to push the public offering-merger initiative forward.

Waste Industries is, like GFL, a regional provider of non-hazardous solid waste collection, recycling, disposal, and transfer services. WI is far senior to GFL, having been founded in 1970. They operate in 9 different north-eastern US states, employ nearly 3,000 people, serve nearly 80,000 industrial and commercial customers, and provide residential waste collection services to nearly 2 million homes.

The merger was announced complete in November of 2018, but not without some fits and starts. Dovigi delivered a public statement saying, “Waste Industries will double GFL’s footprint in North America, adding collection, transfer, recovery, and landfill services in US markets, growing our base and forming an extended platform from which we can continue to execute our proven growth strategy. Waste Industries complements our brand with a long history of excellent customer service and a proven track record of leveraging technology, processes, and systems to boost efficiencies. We’re excited to welcome their management team and workforce into the GFL family.”

Wasting no time, GFL announced less than one year later that the company had filed for IPO in Canada that it had plans to do the same in the United States. Just three months after that, GFL announced that it is launching a waste management IPO in the US, with hopes of raising two and a half billion USD.

According to NewsWire.ca, “GFL intends to use the proceeds to redeem its outstanding 5.375% notes due in 2023. Any remaining proceeds are to be used for general purposes, including acquisitions.” J.P. Morgan, Goldman Sachs & Co. LLC and other major financial organizations served as joint book-running managers for the offer.

Just a few weeks after this announcement, the Toronto Star published an article entitled, “GFL Environmental Cancels IPO After Investors Seek Price Below Range.”

Dovivi emailed a statement to the press which read, “Our shareholders determined that the pricing offered at 18.00 it did not represent fair value and have elected to revisit public markets at a later time.”

To the average business owner, ups and downs like these seem tectonic. But these are par for the course of a major transnational corporation looking to expand. At the end of the day, all the turbulence hasn’t hurt GFL- but only slowed its inevitable maturation. The company’s growth hasn’t been up to the hopes of shareholders, but the company still holds a strong position as a major leader in the industry.

GFL’s strategy going forward is to position itself as the consolidator of choice in a market that is highly fragmented. Their efforts to merge with other major waste-management companies reflect this. The company notes that it can only benefit in terms of operational efficiency by scaling up.

The lesson of GFL might be that breaking out of local markets is a heck of a lot easier than breaking regional boundaries of scale.

Source
https://gflusa.com/
https://www.thestar.com/business/2019/11/06/gfl-environmental-cancels-ipo-after-investors-seek-price-below-range.html
https://www.thestar.com/business/2019/07/22/gfl-environmental-inc-seeks-initial-public-offering-on-toronto-stock-exchange.html
https://www.newswire.ca/news-releases/gfl-environmental-inc-announces-launch-of-its-initial-public-offering-820096311.html
https://www.marketwatch.com/press-release/gfl-environmental-inc-announces-proposed-private-offering-of-senior-notes-in-connection-with-waste-industries-merger-2018-10-22
https://www.waste360.com/mergers-and-acquisitions/gfl-completes-merger-waste-industries

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