KKR, Blackstone and others bid for GFL Environmental (GFL.US), and the deal may become one of the biggest leveraged acquisitions this year

The Zhitong Finance App learned that according to reports, KKR, Energy Capital Partners, and Kuroishi are seeking a joint bid for environmental service company GfL Environmental (GFL.US), while Brookfield Asset Management and IFM Investors are joining forces to compete. The news boosted GFL Environmental's stock price by more than 10% during the post-market trading session on Wednesday EST.

The report said that a decision on this deal may be made in the next few weeks, and the deal may become one of the biggest leveraged buyouts this year. People familiar with the matter said that no final decision has been made, the schedule may change, other bidders may join, and the existing consortium may be reorganized.

The report pointed out that GFL Environmental's special committee may take time to evaluate the proposal and may ask the bidders to raise the offer. The company set up a special committee in July to oversee potential merger or privatization negotiations after the company received initial acquisition offers. CEO Patrick Dovigi promoted the company's listing in 2020. He said at the time that he would invest all of his shares in any potential transaction. This structure is usually associated with leveraged buyouts.

According to reports, GFL Environmental is one of the largest waste management companies in North America. It has about 15,000 employees in the US and Canada, and operates recycling facilities, transfer stations, and landfills. By the last close, its market capitalization was close to $18 billion.

CEO says he will continue to take the helm

Dovigi said in an interview that he intends to continue to lead the company and retain ownership regardless of the outcome of the strategy.

“I am very satisfied with the current state of the company,” he said, adding that he is not planning to leave the company he has been leading for almost 20 years. He also said that GFL Environmental's current development has only just entered the “third phase” and reaffirmed his confidence in the company's future, saying the company is at an “exciting time.”

Institutions and retail investors are optimistic

On Stocktwits, the number of followers of GFL Environmental stock increased by more than 11% over the past 12 months, during which time retail perceptions of the stock rose from “neutral” to “bullish.”

A user said earlier this week: “We may see acquisitions this week. Before the Federal Reserve raises interest rates, buyers can replace fixed-rate debt with lower interest rates.”

According to Koyfin data, 21 analysts covering GFL Environmental gave a “buy” consensus rating, with an average target price of $52.63, which means there is still room for about 28% increase compared to the current stock price.

As of press release, GFL Environmental was up 4.67% to $42.99 in the premarket.