GFL Environmental Inc.: Ontario Teachers’ Pension Plan and Others Sell Subordinate Voting Shares
On March 31, 2025, GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) (“GFL” or the “Company”) made an important announcement regarding a secondary offering of subordinate voting shares. Ontario Teachers’ Pension Plan Board, GFL Borrower II (Cayman) LP, Poole Private Capital, LLC, and entities affiliated with HPS Investment Partners, LLC collectively sold an aggregate of 18,887,723 subordinate voting shares in the Offering. The Company itself purchased 7,056,027 subordinate voting shares under the Offering.
The Secondary Offering Transaction
GFL received exemptive relief from the Ontario Securities Commission on March 13, 2025, allowing it to purchase up to 38,157,045 subordinate voting shares in certain secondary offerings until March 13, 2026 (the “Order”). The Company then exercised its rights under the Order to participate in the Offering. The Secondary Offering Transaction resulted in GFL increasing its ownership of the Company by approximately 18.4%.
Impact on Individual Investors
The secondary offering by major investors may impact the individual investors in several ways. First, the increased ownership by GFL could potentially lead to changes in the Company’s strategic direction. Second, the reduced number of shares available for trading may impact the liquidity of the stock. Lastly, investors may see changes in the Company’s share price as the market adjusts to the new ownership structure.
- Potential Changes in Strategic Direction: As a larger shareholder, GFL may have more influence over the Company’s decisions, which could lead to changes in the strategic direction of the business.
- Impact on Liquidity: With fewer shares available for trading, the stock’s liquidity may be reduced, making it harder for investors to buy or sell their shares quickly.
- Adjustment to New Ownership Structure: The market will need to adjust to the new ownership structure, which could lead to fluctuations in the Company’s share price.
Impact on the World
The secondary offering by major investors in GFL Environmental Inc. may also have broader implications. For instance, it could:
- Affect the Waste Management Industry: As one of the largest environmental services companies in North America, GFL’s performance can influence the waste management industry as a whole.
- Impact the Canadian Capital Markets: The transaction represents a significant deal in the Canadian capital markets, showcasing the attractiveness of Canadian companies to large institutional investors.
- Influence Mergers and Acquisitions: With a larger shareholding, GFL may be more aggressive in pursuing mergers and acquisitions, expanding its reach in the environmental services sector.
Conclusion
The secondary offering by major investors in GFL Environmental Inc. marks an important moment for the Company and its stakeholders. While the transaction may impact individual investors and the broader market, it also highlights the Company’s continued growth and attractiveness to large institutional investors. As GFL continues to evolve, it will be interesting to see how the market responds to the new ownership structure and the potential implications for the waste management industry and Canadian capital markets.
