GFL Environmental Inc. has completed its previously announced spin-off of GFL Infrastructure Group Inc. to create Green Infrastructure Partners Inc., a leading Canadian provider of vertically integrated infrastructure services. Immediately following the acquisition of GFL Infrastructure, GIP acquired Coco Paving, Inc. and its affiliates (collectively, “Coco”). Coco has operations across Ontario, Quebec, Manitoba and Saskatchewan that include access to over 250 aggregate sites, 33 asphalt plants, eight concrete plants and one of Canada’s largest asphalt cement terminals. On a combined basis, GIP is expected to generate annualized revenue in excess of C$1.1 billion.
As consideration for the spin-off of GFL Infrastructure, GFL received C$224 million in cash and a 45% equity interest in GIP, an entity that is controlled by funds managed by HPS Investment Partners Inc. (“HPS Investment Partners” or “HPS”) through a 47% equity interest. Affiliates controlled by Mr. Patrick Dovigi, the Executive Chair of the GIP board of directors, hold an 8% equity interest in GIP. “The spin-off of GFL Infrastructure is part of our ongoing strategy to rationalize our balance sheet to maximize the value of our asset base,” said Mr. Patrick Dovigi, Founder and Chief Executive Officer of GFL. “We intend to invest the proceeds received from the transaction in our robust near-term acquisition pipeline.”
Mr. Dovigi added, “We believe that our investment in GIP will result in meaningful value creation for our shareholders. GIP will benefit from two highly regarded brands in GFL Infrastructure and Coco, significant scale and a broad portfolio of service offerings across both private and public infrastructure projects. Given the fragmented Canadian infrastructure services market, GIP will be well positioned to expand its platform by pursuing both tuck-ins and potentially larger-sized acquisitions.”
Mr. Dovigi concluded, “We are also very excited to be partnering again with HPS Investment Partners. HPS has been an investor in GFL since 2014 and we look forward to replicating our successful relationship with them as we grow GIP together.”
Scot French, Governing Partner of HPS, said, “We have had a long and successful relationship with GFL and continue to be impressed with GFL’s ability to strategically position its assets to maximize their value for shareholders. We believe GIP’s compelling breadth of infrastructure service offerings, combined with its high caliber management team, will create significant additional value for both companies.”