SEATTLE (Recycling Monster): GFL Environmental Inc. announced that it has entered into a definitive agreement towards sale of its Environmental Services business. The enterprise value of the deal is estimated at around $8.0 billion.
According to the agreement, GFL will continue to own an equity stake in the Environmental Services company worth $1.7 billion. The company anticipates that the transaction will generate cash proceeds of about $6.2 billion. The net profits will be used for debt repayment up to $3.75 billion. Additionally, $2.25 will be available for the repurchase of GFL shares, with the remaining funds going toward transaction fees and other business-related costs.
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The sale of GFL's Environmental Services division at an enterprise value of $8.0 billion, according to Patrick Dovigi, the company's founder and CEO, is far higher than what was initially anticipated. According to him, the deal will assist the business in significantly reducing the amount of debt on its balance sheet, which will free up funds to increase capital expenditures for expansion initiatives.
More details on the financial implications of the transaction will be provided along with full year 2024 results.
Within five years of closing, GFL has the right to buy back the Environmental Services division.