GFL Environmental Inc. is exploring a potential take-private transaction after receiving interest from various buyout firms. The North American waste management company has engaged advisers to evaluate its options, with preliminary interest reportedly coming from multiple private equity firms. CEO Patrick Dovigi controls roughly one-quarter of the company through multiple voting shares, making his support crucial for any successful acquisition. He has expressed willingness to entertain an offer of around $50 per share, significantly higher than the company's current trading price of $42.29, which he believes undervalues the company.
The company has formed a special committee of independent directors to review these offers, and has engaged a financial advisory bank to assist in the process. Reported bids from at least six private equity firms range from $50 to $55 per share, with offers expected by mid-September. Dovigi has stated he is "not a seller" at lower price points and plans to roll over 100% of his equity into any proposed deal, indicating his commitment to the company's future under private ownership.
This move comes as GFL, despite being unprofitable with a negative earnings per share of -$0.55 TTM and a negative net margin of -3.26%, is valued by the market more on its top-line potential and strategic positioning. The company's Price-to-Sales ratio stands at 3.09, slightly above its historical median, suggesting investor expectations for future growth. GuruFocus estimates GFL's intrinsic value at $45.27 per share, indicating it is approximately 6.6% undervalued at its current price. The CEO also stated that some of the parties interested in taking the company private were impressed with GFL's acquisition of Secure Waste Infrastructure Corp., which had initially caused GFL's shares to slump.
