Australia’s Macquarie Group and U.S. private equity firm HPS Investment Partners have invested $225 million in GFL Environmental Inc, a Toronto-based environmental services company. The funds raised will used in part to redeem $247 million of senior unsecured notes. GFL also announced its buy of Rizzo Environmental Services Inc, a U.S. provider of solid waste collection and recycling processing and brokerage, and its acquisition of Enviro-Smart Organics Ltd and West Coast Lawns, a Canadian waste processing facility and turf farm. In February, GFL raised $458 million from private equity investors to support its buy of Matrec Services Inc.
GFL Environmental Inc. Announces First U.S. Acquisition, B.C. Organics Acquisition, Completion of C$950M Senior Secured Credit Facilities, C$225M Equity Investment and Redemption of C$247M of Senior Unsecured Notes Due 2018
TORONTO, Oct. 3, 2016 /CNW/ – GFL Environmental Inc. (“GFL”) announced today that on September 30, 2016, it completed its merger of Rizzo Environmental Services, Inc. and its subsidiary companies (“Rizzo Environmental” ) with a new U.S. subsidiary of GFL.
Headquartered in Sterling Heights, Michigan, Rizzo Environmental is a market leader in municipal, commercial and industrial solid waste collection and in commercial recycling processing and brokerage. Rizzo Environmental currently provides collection services to more than 40 municipalities in Southeastern Michigan. Its recycling operations, with 3 commercial recycling facilities, serve customers in lower Michigan and northern Ohio. The current management team of Rizzo Environmental, led by Chuck Rizzo, Jr. will remain with the company.
Patrick Dovigi, GFL’s Founder and CEO said: “Rizzo Environmental has a loyal and growing customer base because of its market leading customer service and its committed management team led by Chuck Rizzo, Jr. who brings over 25 years of waste industry experience and relationships to GFL. Chuck and his management team share the same growth vision and commitment to safety as GFL. Rizzo Environmental is a natural fit, both geographically and culturally, for GFL’s plans to grow the GFL brand into the United States. We expect Rizzo Environmental to serve as a foundation from which GFL can continue its growth strategy into the Midwestern U.S. through both acquisitions and organic growth. The customers and employees of Rizzo Environmental will see little change in the way that Rizzo Environmental has historically operated with its headquarters remaining in Sterling Heights.”
Chuck Rizzo said: “I’m one of the investors who unanimously approved this transaction, and I’m grateful to retain and expand my equity share. What changes for Rizzo Environmental is our name and our capacity to grow. Our local leadership remains the same, as does our absolute commitment to our customers.”
GFL also announced that it has completed the acquisition of Enviro-Smart Organics Ltd. and West Coast Lawns, a state of the art organics waste processing facility and turf farm in Delta, British Columbia. The Enviro-Smart acquisition confirms GFL’s commitment to investing in leading edge environmental processes that can be applied and offered to our customers from other GFL facilities.
The acquisition was funded by C$950 million of Senior Secured Credit Facilities, consisting of a C$340 million Amended and Restated Revolving Credit Facility to replace the existing C$340 million senior secured credit facility and a new C$610 million Term Loan B Facility consisting of two tranches; a USD denominated tranche of US$370 million and a CAD denominated tranche of C$130 million. BMO Capital Markets acted as lead arranger and sole book runner on the Amended and Restated Revolving Credit Facility and Barclays, BMO Capital Markets, Credit Suisse Securities (USA) LLC and Macquarie Capital (USA) Inc. acted as joint lead arrangers and joint bookrunners for the Term Loan Facility.
Coincident with the Rizzo Environmental closing, existing investors including Macquarie Infrastructure Partners III, an infrastructure fund managed by Macquarie Infrastructure and Real Assets, a division of Macquarie Group (ASX: MQG; ADR: MQBKY), and HPS Investment Partners, LLC invested an additional C$225 Million in GFL Environmental Holdings Inc. (“Holdings”). Holdings used the investment proceeds to acquire shares of GFL.
A portion of the proceeds of the financing and equity transactions was used to redeem C$247M principal amount of 7.5% senior unsecured noted due 2018, being all of the outstanding notes, for a redemption price of 103.75% of the principal amount, plus accrued and unpaid interest on the outstanding principal, to October 3, 2016.
About GFL Environmental Inc.
GFL, headquartered in Toronto, ON, is a Canadian diversified environmental services company offering services in solid waste management, liquid waste management and soil remediation. Through its platform of operations in Canada and the U.S., GFL serves over 80,000 commercial, industrial and institutional customers, more than 2.5 million households under municipal collection contracts and has a workforce of more than 4,000 employees.
This news release may contain forward-looking information. Such forward-looking information is based on certain assumptions and analysis made by GFL in light of its experience and perception of current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results, performance or achievements will conform to GFL’s expectations and predictions is subject to market conditions and a number of known and unknown risks and uncertainties which could cause actual results to differ materially from GFL’s expectations. We assume no obligation to update the information contained in this announcement.
For further information: Patrick Dovigi, President and Chief Executive Officer, +1 416 673 9385, firstname.lastname@example.org; Roslyn Samtleben, Chief Financial Officer, +1 416 673 9384, email@example.com
Photo courtesy of GFL Environmental Inc