PREVIEW: GFL Environmental Holdings takes second shot at IPO

A Canada-based waste management firm is trying their hand at an IPO on the NYSE again.

Canada-based waste management company, GFL Environmental Holdings, will look to price 73.2 million shares at a $20-$21 range on Tuesday night after the close. At the midpoint of the range, GFL would raise $1.5bn in the common and are looking at pricing 14.0mm tangible-equity-units (TEUs) for a more than $2.0bn complete transaction. The units will be used to pay down debt.

GFL Environmental is aiming to prove they are no ordinary trash company.

Led by a former minor league hockey player, the company offers a compelling growth story but one that is a “grow at all cost” type of formula. From 2017 to 2019,  their CAGR (Compound Annual Growth Rate ) exceeds comps going from $1.3bn –> $3.35bn. The growth has come at a cost as net loss grew from ($101m) –> ($452m).

The company attempted to go public at $20-$24 in November but was not willing to listen to a discount. With a narrowed range of $20-$21 when they set terms last week, they now attempt to price its offering a week after the S&P 500 shed nearly 11%.

This attempt is, in fact, its third try at going public — the company also failed in 2018.

They currently serve over 4 million households, including those covered by more than 650 municipal collection contracts, and over 135,000 commercial and industrial customers. They are selectively expanding the geographic presence which includes closing on a pair of acquisition totaling US$443m since December 31.

As the only IPO on the schedule, the trash company has the syndicate spotlight. How is the buyside embracing this deal?

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OFFERING DETAILS

Company: GFL Environmental Holdings
Symbol: GFL
Description: GFL is the fourth largest diversified environmental services company in North America, as measured by revenue and North American operating footprint
Shares: 73.17 million
Price Range: $20.00-$21.00
Market Cap: $6.7b-$7.0b
Trade Date: Tuesday, March 4
Underwriter(s): J.P. Morgan, BMO Capital Markets, Goldman Sachs, RBC Capital Markets, Scotiabank, Barclays, BC Partners, Raymond James, Stifel, TD Securities
Co-Manager(s): BofA Securities, CIBC Capital. HSBC, National Bank Finance
Terms Added: 2-25-20
Previously Postponed in 2019
Note: Concurrent Senior Notes Offering
LINK TO PROSPECTUS