GFL plans private offering after delaying initial plans for IPO
GFL Environmental Inc. is betting that garbage is a recession-proof investment.
As the company announced a spate of offerings on Monday expected to raise more than US$1 billion, including a US$275 million in unsecured notes and an additional US$500 million in secured notes, its chief executive officer said that market conditions and global trade turmoil did not factor into the decision-making process.
“That’s the beauty of the waste business,” GFL founder and CEO Patrick Dovigi told BNN Bloomberg in an interview Monday. “Regardless of what’s happening in China or other parts of the world, I think – at the end of the day – everyone’s still producing garbage … whether there’s a recession or not, we’re still putting out garbage every day.”
The private offering comes just over a month after the company pulled the plug on an initial public offering it hoped could raise upwards of US$2 billion.
Dovigi said the disasters that have met some recent IPOs and potential IPOs had an effect on the company’s ability to get fair market value.
“Obviously with WeWork and Peloton, and just some of the negative backdrop in the IPO market, I think that factored into what kind of a discount certain investors wanted from us,” he said. “But, like anything, we’ve done bond deals in the past where we’ve had to pull them. I think [in] time, we’ll go back to the market at the appropriate time.”
He added that the company plans to keep the prospectus live with the SEC and to keep the filing current, to potentially revisit “when the market window opens itself up.”
The company said in a Monday release that the proceeds from the new offerings and equity financing would go towards “certain acquisitions, including a pending acquisition.” Dovigi further clarified to BNN Bloomberg that “two of the acquisitions we’re now focused on in the U.S. are a little bit larger in size, that we’re funding with this new debt and equity offering.”
Dovigi said that the company does not have its sights set on expansion, but rather a densification of its existing footprints.
“The continued focus is in the 23 (U.S.) states that we’re operating in, and the nine provinces in Canada,” he said. “And, we’ll continue densifying those existing markets.”
But Dovigi said that the company is not looking to stray from its Canadian roots.
“Canada has always been home for us,” he said. “So, a lot of the M&A that we do continues to be in Canada.”